Correlation Between Affluent Medical and Entech SE

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

Diversification Opportunities for Affluent Medical and Entech SE

-0.01

Correlation Coefficient

Affluent Medical  Entech SE

Good diversification

The 3 months correlation between Affluent and Entech is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and Entech SE SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entech SE SAS 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 Entech SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entech SE SAS has no effect on the direction of Affluent Medical i.e., Affluent Medical and Entech SE go up and down completely randomly.

Pair Corralation between Affluent Medical and Entech SE

Assuming the 90 days trading horizon Affluent Medical SAS is expected to generate 1.65 times more return on investment than Entech SE. However, Affluent Medical is 1.65 times more volatile than Entech SE SAS. It trades about -0.01 of its potential returns per unit of risk. Entech SE SAS is currently generating about -0.02 per unit of risk. If you would invest  133.00  in Affluent Medical SAS on April 25, 2025 and sell it today you would lose (3.00) from holding Affluent Medical SAS or give up 2.26% of portfolio value over 90 days.

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

Affluent Medical SAS  vs.  Entech SE SAS

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 somewhat strong basic indicators, Affluent Medical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Entech SE SAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entech SE SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Entech SE is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Affluent Medical and Entech SE

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

The idea behind Affluent Medical SAS and Entech SE SAS 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.