Correlation Between Affluent Medical and Hotel Majestic
Can any of the company-specific risk be diversified away by investing in both Affluent Medical and Hotel Majestic 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 Hotel Majestic 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 Hotel Majestic Cannes, you can compare the effects of market volatilities on Affluent Medical and Hotel Majestic 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 Hotel Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affluent Medical and Hotel Majestic.
Diversification Opportunities for Affluent Medical and Hotel Majestic
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Affluent and Hotel is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and Hotel Majestic Cannes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Majestic Cannes 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 Hotel Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Majestic Cannes has no effect on the direction of Affluent Medical i.e., Affluent Medical and Hotel Majestic go up and down completely randomly.
Pair Corralation between Affluent Medical and Hotel Majestic
If you would invest 520,000 in Hotel Majestic Cannes on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Hotel Majestic Cannes or generate 0.0% 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. Hotel Majestic Cannes
Performance |
| Timeline |
| Affluent Medical SAS |
| Hotel Majestic Cannes |
Affluent Medical and Hotel Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affluent Medical and Hotel Majestic
The main advantage of trading using opposite Affluent Medical and Hotel Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affluent Medical position performs unexpectedly, Hotel Majestic 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 Hotel Majestic will offset losses from the drop in Hotel Majestic's long position.| Affluent Medical vs. Aramis SAS | Affluent Medical vs. Spartoo SAS | Affluent Medical vs. Hydrogene De France | Affluent Medical vs. Omer Decugis Cie |
| Hotel Majestic vs. Eutelsat Communications SA | Hotel Majestic vs. Novatech Industries SA | Hotel Majestic vs. Axway Software | Hotel Majestic vs. Mauna Kea Technologies |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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