Correlation Between Mednax and Airsculpt Technologies

Can any of the company-specific risk be diversified away by investing in both Mednax and Airsculpt Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mednax and Airsculpt Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mednax Inc and Airsculpt Technologies, you can compare the effects of market volatilities on Mednax and Airsculpt Technologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mednax with a short position of Airsculpt Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mednax and Airsculpt Technologies.

Diversification Opportunities for Mednax and Airsculpt Technologies

0.82

Correlation Coefficient

Mednax  Airsculpt Technologies

Very poor diversification

The 3 months correlation between Mednax and Airsculpt is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mednax Inc and Airsculpt Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airsculpt Technologies and Mednax is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mednax Inc are associated (or correlated) with Airsculpt Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airsculpt Technologies has no effect on the direction of Mednax i.e., Mednax and Airsculpt Technologies go up and down completely randomly.

Pair Corralation between Mednax and Airsculpt Technologies

Allowing for the 90-day total investment horizon Mednax Inc is expected to generate 0.28 times more return on investment than Airsculpt Technologies. However, Mednax Inc is 3.58 times less risky than Airsculpt Technologies. It trades about -0.16 of its potential returns per unit of risk. Airsculpt Technologies is currently generating about -0.28 per unit of risk. If you would invest  1,476  in Mednax Inc on September 24, 2024 and sell it today you would lose (67.00) from holding Mednax Inc or give up 4.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Mednax Inc  vs.  Airsculpt Technologies

Mednax Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mednax Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, Mednax exhibited solid returns over the last few months and may actually be approaching a breakup point.

Airsculpt Technologies

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Airsculpt Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Airsculpt Technologies is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mednax and Airsculpt Technologies

The main advantage of trading using opposite Mednax and Airsculpt Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mednax position performs unexpectedly, Airsculpt Technologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Airsculpt Technologies will offset losses from the drop in Airsculpt Technologies' long position.

The idea behind Mednax Inc and Airsculpt Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.