Correlation Between Granite 3x and Affluent Medical
Can any of the company-specific risk be diversified away by investing in both Granite 3x 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 Granite 3x and Affluent Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite 3x LVMH and Affluent Medical SAS, you can compare the effects of market volatilities on Granite 3x 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 Granite 3x with a short position of Affluent Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite 3x and Affluent Medical.
Diversification Opportunities for Granite 3x and Affluent Medical
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Granite and Affluent is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Granite 3x LVMH 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 Granite 3x 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 Granite 3x LVMH 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 Granite 3x i.e., Granite 3x and Affluent Medical go up and down completely randomly.
Pair Corralation between Granite 3x and Affluent Medical
Assuming the 90 days trading horizon Granite 3x LVMH is expected to under-perform the Affluent Medical. In addition to that, Granite 3x is 1.75 times more volatile than Affluent Medical SAS. It trades about -0.14 of its total potential returns per unit of risk. Affluent Medical SAS is currently generating about -0.17 per unit of volatility. If you would invest 180.00 in Affluent Medical SAS on August 31, 2024 and sell it today you would lose (22.00) from holding Affluent Medical SAS or give up 12.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Granite 3x LVMH vs. Affluent Medical SAS
Performance |
| Timeline |
| Granite 3x LVMH |
| Affluent Medical SAS |
Granite 3x and Affluent Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite 3x and Affluent Medical
The main advantage of trading using opposite Granite 3x and Affluent Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite 3x 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 Granite 3x LVMH 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.| Affluent Medical vs. Hydrogene De France | Affluent Medical vs. Manitou BF SA | Affluent Medical vs. Ossiam Minimum Variance | Affluent Medical vs. Granite 3x LVMH |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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