Correlation Between AFFLUENT MEDICAL and EMPEROR ENT

Can any of the company-specific risk be diversified away by investing in both AFFLUENT MEDICAL and EMPEROR ENT 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 AFFLUENT MEDICAL and EMPEROR ENT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AFFLUENT MEDICAL SAS and EMPEROR ENT HOTEL, you can compare the effects of market volatilities on AFFLUENT MEDICAL and EMPEROR ENT 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 AFFLUENT MEDICAL with a short position of EMPEROR ENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFFLUENT MEDICAL and EMPEROR ENT.

Diversification Opportunities for AFFLUENT MEDICAL and EMPEROR ENT

0.62

Correlation Coefficient

AFFLUENT MEDICAL  EMPEROR ENT

Poor diversification

The 3 months correlation between AFFLUENT and EMPEROR is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AFFLUENT MEDICAL SAS and EMPEROR ENT HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMPEROR ENT HOTEL and AFFLUENT MEDICAL 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 AFFLUENT MEDICAL SAS are associated (or correlated) with EMPEROR ENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMPEROR ENT HOTEL has no effect on the direction of AFFLUENT MEDICAL i.e., AFFLUENT MEDICAL and EMPEROR ENT go up and down completely randomly.

Pair Corralation between AFFLUENT MEDICAL and EMPEROR ENT

Assuming the 90 days horizon AFFLUENT MEDICAL SAS is expected to under-perform the EMPEROR ENT. But the stock apears to be less risky and, when comparing its historical volatility, AFFLUENT MEDICAL SAS is 1.81 times less risky than EMPEROR ENT. The stock trades about -0.04 of its potential returns per unit of risk. The EMPEROR ENT HOTEL is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2.80  in EMPEROR ENT HOTEL on April 20, 2025 and sell it today you would earn a total of  0.20  from holding EMPEROR ENT HOTEL or generate 7.14% return on investment over 90 days.

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

AFFLUENT MEDICAL SAS  vs.  EMPEROR ENT HOTEL

AFFLUENT MEDICAL SAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days AFFLUENT MEDICAL SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

EMPEROR ENT HOTEL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EMPEROR ENT HOTEL are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, EMPEROR ENT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AFFLUENT MEDICAL and EMPEROR ENT

The main advantage of trading using opposite AFFLUENT MEDICAL and EMPEROR ENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFFLUENT MEDICAL position performs unexpectedly, EMPEROR ENT 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 EMPEROR ENT will offset losses from the drop in EMPEROR ENT's long position.

The idea behind AFFLUENT MEDICAL SAS and EMPEROR ENT HOTEL 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.