Correlation Between Visa and Aethlon Medical
Can any of the company-specific risk be diversified away by investing in both Visa and Aethlon 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 Visa and Aethlon Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Aethlon Medical, you can compare the effects of market volatilities on Visa and Aethlon 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 Visa with a short position of Aethlon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Aethlon Medical.
Diversification Opportunities for Visa and Aethlon Medical
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Aethlon is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Aethlon Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aethlon Medical and Visa 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 Visa Class A are associated (or correlated) with Aethlon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aethlon Medical has no effect on the direction of Visa i.e., Visa and Aethlon Medical go up and down completely randomly.
Pair Corralation between Visa and Aethlon Medical
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.18 times more return on investment than Aethlon Medical. However, Visa Class A is 5.63 times less risky than Aethlon Medical. It trades about 0.11 of its potential returns per unit of risk. Aethlon Medical is currently generating about -0.02 per unit of risk. If you would invest 27,414 in Visa Class A on September 19, 2024 and sell it today you would earn a total of 4,737 from holding Visa Class A or generate 17.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Visa Class A vs. Aethlon Medical
Performance |
| Timeline |
| Visa Class A |
| Aethlon Medical |
Visa and Aethlon Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Aethlon Medical
The main advantage of trading using opposite Visa and Aethlon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Aethlon 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 Aethlon Medical will offset losses from the drop in Aethlon Medical's long position.The idea behind Visa Class A and Aethlon Medical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Aethlon Medical vs. Tivic Health Systems | Aethlon Medical vs. Bluejay Diagnostics | Aethlon Medical vs. Heart Test Laboratories | Aethlon Medical vs. Nuwellis |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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