Correlation Between Affluent Medical and Soditech

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

Diversification Opportunities for Affluent Medical and Soditech

-0.44

Correlation Coefficient

Affluent Medical  Soditech

Very good diversification

The 3 months correlation between Affluent and Soditech is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and Soditech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soditech SA 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 Soditech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soditech SA has no effect on the direction of Affluent Medical i.e., Affluent Medical and Soditech go up and down completely randomly.

Pair Corralation between Affluent Medical and Soditech

Assuming the 90 days trading horizon Affluent Medical SAS is expected to under-perform the Soditech. But the stock apears to be less risky and, when comparing its historical volatility, Affluent Medical SAS is 1.87 times less risky than Soditech. The stock trades about -0.04 of its potential returns per unit of risk. The Soditech SA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  150.00  in Soditech SA on April 22, 2025 and sell it today you would earn a total of  50.00  from holding Soditech SA or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Affluent Medical SAS  vs.  Soditech SA

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.

Soditech SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Soditech SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Soditech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Affluent Medical and Soditech

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

The idea behind Affluent Medical SAS and Soditech SA 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..