Correlation Between Affluent Medical and ISPD Network
Can any of the company-specific risk be diversified away by investing in both Affluent Medical and ISPD Network 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 ISPD Network 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 ISPD Network SA, you can compare the effects of market volatilities on Affluent Medical and ISPD Network 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 ISPD Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affluent Medical and ISPD Network.
Diversification Opportunities for Affluent Medical and ISPD Network
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Affluent and ISPD is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and ISPD Network SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISPD Network 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 ISPD Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISPD Network SA has no effect on the direction of Affluent Medical i.e., Affluent Medical and ISPD Network go up and down completely randomly.
Pair Corralation between Affluent Medical and ISPD Network
Assuming the 90 days trading horizon Affluent Medical SAS is expected to under-perform the ISPD Network. In addition to that, Affluent Medical is 3.92 times more volatile than ISPD Network SA. It trades about -0.16 of its total potential returns per unit of risk. ISPD Network SA is currently generating about 0.22 per unit of volatility. If you would invest 298.00 in ISPD Network SA on August 29, 2024 and sell it today you would earn a total of 14.00 from holding ISPD Network SA or generate 4.7% 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. ISPD Network SA
Performance |
| Timeline |
| Affluent Medical SAS |
| ISPD Network SA |
Affluent Medical and ISPD Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affluent Medical and ISPD Network
The main advantage of trading using opposite Affluent Medical and ISPD Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affluent Medical position performs unexpectedly, ISPD Network 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 ISPD Network will offset losses from the drop in ISPD Network's long position.| Affluent Medical vs. Hydrogene De France | Affluent Medical vs. Manitou BF SA | Affluent Medical vs. Ossiam Minimum Variance | Affluent Medical vs. Ekinops SA |
| ISPD Network vs. Lexibook Linguistic Electronic | ISPD Network vs. Manitou BF SA | ISPD Network vs. Ossiam Minimum Variance | ISPD Network vs. Ekinops SA |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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