Correlation Between Affluent Medical and Reworld Media
Can any of the company-specific risk be diversified away by investing in both Affluent Medical and Reworld Media 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 Reworld Media 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 Reworld Media, you can compare the effects of market volatilities on Affluent Medical and Reworld Media 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 Reworld Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affluent Medical and Reworld Media.
Diversification Opportunities for Affluent Medical and Reworld Media
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Affluent and Reworld is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and Reworld Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reworld Media 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 Reworld Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reworld Media has no effect on the direction of Affluent Medical i.e., Affluent Medical and Reworld Media go up and down completely randomly.
Pair Corralation between Affluent Medical and Reworld Media
Assuming the 90 days trading horizon Affluent Medical SAS is expected to generate 1.05 times more return on investment than Reworld Media. However, Affluent Medical is 1.05 times more volatile than Reworld Media. It trades about 0.0 of its potential returns per unit of risk. Reworld Media is currently generating about -0.44 per unit of risk. If you would invest 168.00 in Affluent Medical SAS on August 25, 2024 and sell it today you would lose (2.00) from holding Affluent Medical SAS or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affluent Medical SAS vs. Reworld Media
Performance |
| Timeline |
| Affluent Medical SAS |
| Reworld Media |
Affluent Medical and Reworld Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affluent Medical and Reworld Media
The main advantage of trading using opposite Affluent Medical and Reworld Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affluent Medical position performs unexpectedly, Reworld Media 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 Reworld Media will offset losses from the drop in Reworld Media's long position.| Affluent Medical vs. Virbac SA | Affluent Medical vs. Boiron SA | Affluent Medical vs. Bonduelle SCA | Affluent Medical vs. LNA Sante SA |
| Reworld Media vs. Vallourec | Reworld Media vs. Genfit | Reworld Media vs. Innate Pharma | Reworld Media vs. Etablissements Maurel et |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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