Correlation Between Affluent Medical and Renault Socit
Can any of the company-specific risk be diversified away by investing in both Affluent Medical and Renault Socit 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 Renault Socit 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 Renault Socit Anonyme, you can compare the effects of market volatilities on Affluent Medical and Renault Socit 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 Renault Socit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affluent Medical and Renault Socit.
Diversification Opportunities for Affluent Medical and Renault Socit
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Affluent and Renault is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and Renault Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renault Socit Anonyme 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 Renault Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renault Socit Anonyme has no effect on the direction of Affluent Medical i.e., Affluent Medical and Renault Socit go up and down completely randomly.
Pair Corralation between Affluent Medical and Renault Socit
Assuming the 90 days trading horizon Affluent Medical SAS is expected to generate 3.68 times more return on investment than Renault Socit. However, Affluent Medical is 3.68 times more volatile than Renault Socit Anonyme. It trades about 0.02 of its potential returns per unit of risk. Renault Socit Anonyme is currently generating about 0.04 per unit of risk. If you would invest 167.00 in Affluent Medical SAS on September 2, 2024 and sell it today you would lose (7.00) from holding Affluent Medical SAS or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Affluent Medical SAS vs. Renault Socit Anonyme
Performance |
| Timeline |
| Affluent Medical SAS |
| Renault Socit Anonyme |
Affluent Medical and Renault Socit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affluent Medical and Renault Socit
The main advantage of trading using opposite Affluent Medical and Renault Socit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affluent Medical position performs unexpectedly, Renault Socit 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 Renault Socit will offset losses from the drop in Renault Socit'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 |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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