Correlation Between Affluent Medical and Air France
Can any of the company-specific risk be diversified away by investing in both Affluent Medical and Air France 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 Air France 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 Air France KLM SA, you can compare the effects of market volatilities on Affluent Medical and Air France 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 Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affluent Medical and Air France.
Diversification Opportunities for Affluent Medical and Air France
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Affluent and Air is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and Air France KLM SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM 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 Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of Affluent Medical i.e., Affluent Medical and Air France go up and down completely randomly.
Pair Corralation between Affluent Medical and Air France
Assuming the 90 days trading horizon Affluent Medical SAS is expected to under-perform the Air France. In addition to that, Affluent Medical is 2.89 times more volatile than Air France KLM SA. It trades about -0.21 of its total potential returns per unit of risk. Air France KLM SA is currently generating about 0.05 per unit of volatility. If you would invest 752.00 in Air France KLM SA on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Air France KLM SA or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affluent Medical SAS vs. Air France KLM SA
Performance |
| Timeline |
| Affluent Medical SAS |
| Air France KLM |
Affluent Medical and Air France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affluent Medical and Air France
The main advantage of trading using opposite Affluent Medical and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affluent Medical position performs unexpectedly, Air France 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 Air France will offset losses from the drop in Air France's long position.| Affluent Medical vs. Hydrogene De France | Affluent Medical vs. Manitou BF SA | Affluent Medical vs. Ossiam Minimum Variance | Affluent Medical vs. 21Shares Polkadot ETP |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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