Correlation Between Affluent Medical and Sogeclair
Can any of the company-specific risk be diversified away by investing in both Affluent Medical and Sogeclair 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 Sogeclair 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 Sogeclair SA, you can compare the effects of market volatilities on Affluent Medical and Sogeclair 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 Sogeclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affluent Medical and Sogeclair.
Diversification Opportunities for Affluent Medical and Sogeclair
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Affluent and Sogeclair is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and Sogeclair SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sogeclair 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 Sogeclair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sogeclair SA has no effect on the direction of Affluent Medical i.e., Affluent Medical and Sogeclair go up and down completely randomly.
Pair Corralation between Affluent Medical and Sogeclair
Assuming the 90 days trading horizon Affluent Medical SAS is expected to generate 2.32 times more return on investment than Sogeclair. However, Affluent Medical is 2.32 times more volatile than Sogeclair SA. It trades about 0.02 of its potential returns per unit of risk. Sogeclair SA is currently generating about 0.02 per unit of risk. If you would invest 170.00 in Affluent Medical SAS on September 3, 2024 and sell it today you would lose (18.00) from holding Affluent Medical SAS or give up 10.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affluent Medical SAS vs. Sogeclair SA
Performance |
| Timeline |
| Affluent Medical SAS |
| Sogeclair SA |
Affluent Medical and Sogeclair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affluent Medical and Sogeclair
The main advantage of trading using opposite Affluent Medical and Sogeclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affluent Medical position performs unexpectedly, Sogeclair 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 Sogeclair will offset losses from the drop in Sogeclair's long position.| Affluent Medical vs. Biosynex | Affluent Medical vs. Novacyt | Affluent Medical vs. Biophytis SA | Affluent Medical vs. Intrasense |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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