Correlation Between Advanced Medical and AFFLUENT MEDICAL

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

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

Diversification Opportunities for Advanced Medical and AFFLUENT MEDICAL

0.37

Correlation Coefficient

Advanced Medical  AFFLUENT MEDICAL

Weak diversification

The 3 months correlation between Advanced and AFFLUENT is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and AFFLUENT MEDICAL SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFFLUENT MEDICAL SAS and Advanced 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 Advanced Medical Solutions are associated (or correlated) with AFFLUENT MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFFLUENT MEDICAL SAS has no effect on the direction of Advanced Medical i.e., Advanced Medical and AFFLUENT MEDICAL go up and down completely randomly.

Pair Corralation between Advanced Medical and AFFLUENT MEDICAL

Assuming the 90 days trading horizon Advanced Medical is expected to generate 1.66 times less return on investment than AFFLUENT MEDICAL. In addition to that, Advanced Medical is 1.44 times more volatile than AFFLUENT MEDICAL SAS. It trades about 0.0 of its total potential returns per unit of risk. AFFLUENT MEDICAL SAS is currently generating about 0.01 per unit of volatility. If you would invest  138.00  in AFFLUENT MEDICAL SAS on April 2, 2025 and sell it today you would lose (1.00) from holding AFFLUENT MEDICAL SAS or give up 0.72% of portfolio value over 90 days.

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

Advanced Medical Solutions  vs.  AFFLUENT MEDICAL SAS

Advanced Medical Sol

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advanced Medical Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Advanced Medical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Advanced Medical and AFFLUENT MEDICAL

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

The idea behind Advanced Medical Solutions and AFFLUENT MEDICAL 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.