Correlation Between Universal Health and Airsculpt Technologies

Can any of the company-specific risk be diversified away by investing in both Universal Health 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 Universal Health and Airsculpt Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Universal Health Services and Airsculpt Technologies, you can compare the effects of market volatilities on Universal Health 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 Universal Health with a short position of Airsculpt Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and Airsculpt Technologies.

Diversification Opportunities for Universal Health and Airsculpt Technologies

-0.26

Correlation Coefficient

Universal Health  Airsculpt Technologies

Very good diversification

The 3 months correlation between Universal and Airsculpt is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Services and Airsculpt Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airsculpt Technologies and Universal Health 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 Universal Health Services 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 Universal Health i.e., Universal Health and Airsculpt Technologies go up and down completely randomly.

Pair Corralation between Universal Health and Airsculpt Technologies

Considering the 90-day investment horizon Universal Health Services is expected to generate 0.37 times more return on investment than Airsculpt Technologies. However, Universal Health Services is 2.71 times less risky than Airsculpt Technologies. It trades about 0.06 of its potential returns per unit of risk. Airsculpt Technologies is currently generating about 0.02 per unit of risk. If you would invest  13,918  in Universal Health Services on September 28, 2024 and sell it today you would earn a total of  3,980  from holding Universal Health Services or generate 28.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Universal Health Services  vs.  Airsculpt Technologies

Universal Health Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Universal Health Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Airsculpt Technologies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Airsculpt Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Airsculpt Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Universal Health and Airsculpt Technologies

The main advantage of trading using opposite Universal Health and Airsculpt Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health 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 Universal Health Services 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..