Correlation Between Regional Health and Aesthetic Medical
Can any of the company-specific risk be diversified away by investing in both Regional 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 Regional 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 Regional Health Properties and Aesthetic Medical Intl, you can compare the effects of market volatilities on Regional 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 Regional Health with a short position of Aesthetic Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Health and Aesthetic Medical.
Diversification Opportunities for Regional Health and Aesthetic Medical
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regional and Aesthetic is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Regional Health Properties 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 Regional 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 Regional Health Properties 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 Regional Health i.e., Regional Health and Aesthetic Medical go up and down completely randomly.
Pair Corralation between Regional Health and Aesthetic Medical
Considering the 90-day investment horizon Regional Health is expected to generate 13.93 times less return on investment than Aesthetic Medical. But when comparing it to its historical volatility, Regional Health Properties is 3.78 times less risky than Aesthetic Medical. It trades about 0.02 of its potential returns per unit of risk. Aesthetic Medical Intl is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 60.00 in Aesthetic Medical Intl on September 4, 2024 and sell it today you would lose (28.00) from holding Aesthetic Medical Intl or give up 46.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 63.01% |
| Values | Daily Returns |
Regional Health Properties vs. Aesthetic Medical Intl
Performance |
| Timeline |
| Regional Health Prop |
| Aesthetic Medical Intl |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Regional Health and Aesthetic Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Health and Aesthetic Medical
The main advantage of trading using opposite Regional Health and Aesthetic Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional 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.| Regional Health vs. Ramsay Health Care | Regional Health vs. Jack Nathan Medical | Regional Health vs. Nova Leap Health | Regional Health vs. Fresenius SE Co |
| Aesthetic Medical vs. Jack Nathan Medical | Aesthetic Medical vs. Medical Facilities | Aesthetic Medical vs. Fresenius SE Co | Aesthetic Medical vs. Ramsay Health Care |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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