Correlation Between Aesthetic Medical and Pennant
Can any of the company-specific risk be diversified away by investing in both Aesthetic Medical and Pennant 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 Aesthetic Medical and Pennant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aesthetic Medical Intl and Pennant Group, you can compare the effects of market volatilities on Aesthetic Medical and Pennant 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 Aesthetic Medical with a short position of Pennant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aesthetic Medical and Pennant.
Diversification Opportunities for Aesthetic Medical and Pennant
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aesthetic and Pennant is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Aesthetic Medical Intl and Pennant Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pennant Group and Aesthetic 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 Aesthetic Medical Intl are associated (or correlated) with Pennant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pennant Group has no effect on the direction of Aesthetic Medical i.e., Aesthetic Medical and Pennant go up and down completely randomly.
Pair Corralation between Aesthetic Medical and Pennant
Considering the 90-day investment horizon Aesthetic Medical Intl is expected to generate 4.18 times more return on investment than Pennant. However, Aesthetic Medical is 4.18 times more volatile than Pennant Group. It trades about 0.02 of its potential returns per unit of risk. Pennant Group is currently generating about 0.09 per unit of risk. If you would invest 136.00 in Aesthetic Medical Intl on August 24, 2024 and sell it today you would lose (104.00) from holding Aesthetic Medical Intl or give up 76.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.66% |
| Values | Daily Returns |
Aesthetic Medical Intl vs. Pennant Group
Performance |
| Timeline |
| Aesthetic Medical Intl |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Pennant Group |
Aesthetic Medical and Pennant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aesthetic Medical and Pennant
The main advantage of trading using opposite Aesthetic Medical and Pennant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aesthetic Medical position performs unexpectedly, Pennant 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 Pennant will offset losses from the drop in Pennant's long position.| Aesthetic Medical vs. Jack Nathan Medical | Aesthetic Medical vs. Medical Facilities | Aesthetic Medical vs. Fresenius SE Co | Aesthetic Medical vs. Ramsay Health Care |
| Pennant vs. Addus HomeCare | Pennant vs. Morningstar Unconstrained Allocation | Pennant vs. SEI Investments | Pennant vs. Goosehead Insurance |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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