Correlation Between Broadpeak and Affluent Medical
Can any of the company-specific risk be diversified away by investing in both Broadpeak and Affluent Medical 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 Broadpeak and Affluent Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadpeak SA and Affluent Medical SAS, you can compare the effects of market volatilities on Broadpeak and Affluent Medical 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 Broadpeak with a short position of Affluent Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadpeak and Affluent Medical.
Diversification Opportunities for Broadpeak and Affluent Medical
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Broadpeak and Affluent is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Broadpeak SA and Affluent Medical SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affluent Medical SAS and Broadpeak 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 Broadpeak SA are associated (or correlated) with Affluent Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affluent Medical SAS has no effect on the direction of Broadpeak i.e., Broadpeak and Affluent Medical go up and down completely randomly.
Pair Corralation between Broadpeak and Affluent Medical
Assuming the 90 days trading horizon Broadpeak SA is expected to under-perform the Affluent Medical. But the stock apears to be less risky and, when comparing its historical volatility, Broadpeak SA is 1.73 times less risky than Affluent Medical. The stock trades about -0.12 of its potential returns per unit of risk. The Affluent Medical SAS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 173.00 in Affluent Medical SAS on August 30, 2024 and sell it today you would lose (22.00) from holding Affluent Medical SAS or give up 12.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadpeak SA vs. Affluent Medical SAS
Performance |
| Timeline |
| Broadpeak SA |
| Affluent Medical SAS |
Broadpeak and Affluent Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadpeak and Affluent Medical
The main advantage of trading using opposite Broadpeak and Affluent Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadpeak position performs unexpectedly, Affluent Medical 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 Affluent Medical will offset losses from the drop in Affluent Medical's long position.| Broadpeak vs. ATEME SA | Broadpeak vs. Grolleau SAS | Broadpeak vs. Entech SE SAS | Broadpeak vs. Haffner Energy SA |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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