Correlation Between Affluent Medical and X Fab

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

Diversification Opportunities for Affluent Medical and X Fab

-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Affluent and XFAB is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon 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 X Fab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Fab Silicon has no effect on the direction of Affluent Medical i.e., Affluent Medical and X Fab go up and down completely randomly.

Pair Corralation between Affluent Medical and X Fab

Assuming the 90 days trading horizon Affluent Medical SAS is expected to under-perform the X Fab. But the stock apears to be less risky and, when comparing its historical volatility, Affluent Medical SAS is 1.29 times less risky than X Fab. The stock trades about -0.04 of its potential returns per unit of risk. The X Fab Silicon is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  411.00  in X Fab Silicon on April 21, 2025 and sell it today you would earn a total of  261.00  from holding X Fab Silicon or generate 63.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Affluent Medical SAS  vs.  X Fab Silicon

 Performance 
       Timeline  
Affluent Medical SAS 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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.
X Fab Silicon 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in X Fab Silicon are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, X Fab sustained solid returns over the last few months and may actually be approaching a breakup point.

Affluent Medical and X Fab Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Affluent Medical and X Fab

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

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