Correlation Between Venus Concept and Airsculpt Technologies

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

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

Diversification Opportunities for Venus Concept and Airsculpt Technologies

-0.34

Correlation Coefficient

Venus Concept  Airsculpt Technologies

Very good diversification

The 3 months correlation between Venus and Airsculpt is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Venus Concept and Airsculpt Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airsculpt Technologies and Venus Concept 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 Venus Concept 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 Venus Concept i.e., Venus Concept and Airsculpt Technologies go up and down completely randomly.

Pair Corralation between Venus Concept and Airsculpt Technologies

Given the investment horizon of 90 days Venus Concept is expected to generate 1.6 times more return on investment than Airsculpt Technologies. However, Venus Concept is 1.6 times more volatile than Airsculpt Technologies. It trades about 0.09 of its potential returns per unit of risk. Airsculpt Technologies is currently generating about 0.0 per unit of risk. If you would invest  35.00  in Venus Concept on October 12, 2024 and sell it today you would earn a total of  3.00  from holding Venus Concept or generate 8.57% return on investment over 90 days.

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

Venus Concept  vs.  Airsculpt Technologies

Venus Concept

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Venus Concept has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Venus Concept is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Airsculpt Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Airsculpt Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Airsculpt Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Venus Concept and Airsculpt Technologies

The main advantage of trading using opposite Venus Concept and Airsculpt Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Venus Concept 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 Venus Concept 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.