Correlation Between Lifestance Health and Aesthetic Medical
Can any of the company-specific risk be diversified away by investing in both Lifestance Health and Aesthetic 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 Lifestance Health and Aesthetic Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifestance Health Group and Aesthetic Medical Intl, you can compare the effects of market volatilities on Lifestance Health and Aesthetic 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 Lifestance Health with a short position of Aesthetic Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifestance Health and Aesthetic Medical.
Diversification Opportunities for Lifestance Health and Aesthetic Medical
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lifestance and Aesthetic is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lifestance Health Group and Aesthetic Medical Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aesthetic Medical Intl and Lifestance Health 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 Lifestance Health Group are associated (or correlated) with Aesthetic Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aesthetic Medical Intl has no effect on the direction of Lifestance Health i.e., Lifestance Health and Aesthetic Medical go up and down completely randomly.
Pair Corralation between Lifestance Health and Aesthetic Medical
Given the investment horizon of 90 days Lifestance Health is expected to generate 2.61 times less return on investment than Aesthetic Medical. But when comparing it to its historical volatility, Lifestance Health Group is 3.43 times less risky than Aesthetic Medical. It trades about 0.03 of its potential returns per unit of risk. Aesthetic Medical Intl is currently generating about 0.02 of returns per unit of risk over similar time horizon. 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 Together |
| Strength | Insignificant |
| Accuracy | 82.66% |
| Values | Daily Returns |
Lifestance Health Group vs. Aesthetic Medical Intl
Performance |
| Timeline |
| Lifestance Health |
| Aesthetic Medical Intl |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lifestance Health and Aesthetic Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifestance Health and Aesthetic Medical
The main advantage of trading using opposite Lifestance Health and Aesthetic Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifestance Health position performs unexpectedly, Aesthetic 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 Aesthetic Medical will offset losses from the drop in Aesthetic Medical's long position.| Lifestance Health vs. Pennant Group | Lifestance Health vs. Encompass Health Corp | Lifestance Health vs. Enhabit | Lifestance Health vs. Concord Medical Services |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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