Correlation Between Affluent Medical and X Fab
Can any of the company-specific risk be diversified away by investing in both Affluent Medical and X Fab 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 X Fab 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 X Fab Silicon, you can compare the effects of market volatilities on Affluent Medical and X Fab 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 X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affluent Medical and X Fab.
Diversification Opportunities for Affluent Medical and X Fab
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Affluent and XFAB is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon 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 X Fab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Fab Silicon has no effect on the direction of Affluent Medical i.e., Affluent Medical and X Fab go up and down completely randomly.
Pair Corralation between Affluent Medical and X Fab
Assuming the 90 days trading horizon Affluent Medical SAS is expected to under-perform the X Fab. In addition to that, Affluent Medical is 1.27 times more volatile than X Fab Silicon. It trades about -0.16 of its total potential returns per unit of risk. X Fab Silicon is currently generating about -0.11 per unit of volatility. If you would invest 460.00 in X Fab Silicon on August 29, 2024 and sell it today you would lose (36.00) from holding X Fab Silicon or give up 7.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affluent Medical SAS vs. X Fab Silicon
Performance |
| Timeline |
| Affluent Medical SAS |
| X Fab Silicon |
Affluent Medical and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affluent Medical and X Fab
The main advantage of trading using opposite Affluent Medical and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affluent Medical position performs unexpectedly, X Fab 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 X Fab will offset losses from the drop in X Fab'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 |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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