Correlation Between AFFLUENT MEDICAL and ITOCHU

Can any of the company-specific risk be diversified away by investing in both AFFLUENT MEDICAL and ITOCHU 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 ITOCHU 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 ITOCHU, you can compare the effects of market volatilities on AFFLUENT MEDICAL and ITOCHU 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 ITOCHU. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFFLUENT MEDICAL and ITOCHU.

Diversification Opportunities for AFFLUENT MEDICAL and ITOCHU

0.45

Correlation Coefficient

AFFLUENT MEDICAL  ITOCHU

Very weak diversification

The 3 months correlation between AFFLUENT and ITOCHU is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding AFFLUENT MEDICAL SAS and ITOCHU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITOCHU 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 ITOCHU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITOCHU has no effect on the direction of AFFLUENT MEDICAL i.e., AFFLUENT MEDICAL and ITOCHU go up and down completely randomly.

Pair Corralation between AFFLUENT MEDICAL and ITOCHU

Assuming the 90 days horizon AFFLUENT MEDICAL is expected to generate 6.86 times less return on investment than ITOCHU. In addition to that, AFFLUENT MEDICAL is 1.36 times more volatile than ITOCHU. It trades about 0.01 of its total potential returns per unit of risk. ITOCHU is currently generating about 0.07 per unit of volatility. If you would invest  4,225  in ITOCHU on March 31, 2025 and sell it today you would earn a total of  281.00  from holding ITOCHU or generate 6.65% return on investment over 90 days.

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

AFFLUENT MEDICAL SAS  vs.  ITOCHU

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 nearly stable basic indicators, AFFLUENT MEDICAL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

ITOCHU

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ITOCHU are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ITOCHU may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with AFFLUENT MEDICAL and ITOCHU

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

The idea behind AFFLUENT MEDICAL SAS and ITOCHU 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 Global Correlations module to find global opportunities by holding instruments from different markets.