Correlation Between Collins Foods and Advanced Medical

Can any of the company-specific risk be diversified away by investing in both Collins Foods and Advanced Medical 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 Collins Foods and Advanced Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Collins Foods Limited and Advanced Medical Solutions, you can compare the effects of market volatilities on Collins Foods and Advanced Medical 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 Collins Foods with a short position of Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and Advanced Medical.

Diversification Opportunities for Collins Foods and Advanced Medical

0.02

Correlation Coefficient

Collins Foods  Advanced Medical

Significant diversification

The 3 months correlation between Collins and Advanced is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods Limited and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol and Collins Foods 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 Collins Foods Limited are associated (or correlated) with Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of Collins Foods i.e., Collins Foods and Advanced Medical go up and down completely randomly.

Pair Corralation between Collins Foods and Advanced Medical

Assuming the 90 days horizon Collins Foods Limited is expected to generate 1.12 times more return on investment than Advanced Medical. However, Collins Foods is 1.12 times more volatile than Advanced Medical Solutions. It trades about 0.09 of its potential returns per unit of risk. Advanced Medical Solutions is currently generating about 0.09 per unit of risk. If you would invest  446.00  in Collins Foods Limited on April 25, 2025 and sell it today you would earn a total of  64.00  from holding Collins Foods Limited or generate 14.35% return on investment over 90 days.

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

Collins Foods Limited  vs.  Advanced Medical Solutions

Collins Foods Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Collins Foods Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Collins Foods reported solid returns over the last few months and may actually be approaching a breakup point.

Advanced Medical Sol

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Medical Solutions are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Advanced Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Collins Foods and Advanced Medical

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

The idea behind Collins Foods Limited and Advanced Medical Solutions 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.