Correlation Between Aethlon Medical and Adapthealth Corp

Can any of the company-specific risk be diversified away by investing in both Aethlon Medical and Adapthealth Corp 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 Aethlon Medical and Adapthealth Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aethlon Medical and Adapthealth Corp, you can compare the effects of market volatilities on Aethlon Medical and Adapthealth Corp 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 Aethlon Medical with a short position of Adapthealth Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aethlon Medical and Adapthealth Corp.

Diversification Opportunities for Aethlon Medical and Adapthealth Corp

-0.07

Correlation Coefficient

Aethlon Medical  Adapthealth Corp

Good diversification

The 3 months correlation between Aethlon and Adapthealth is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aethlon Medical and Adapthealth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adapthealth Corp and Aethlon 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 Aethlon Medical are associated (or correlated) with Adapthealth Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adapthealth Corp has no effect on the direction of Aethlon Medical i.e., Aethlon Medical and Adapthealth Corp go up and down completely randomly.

Pair Corralation between Aethlon Medical and Adapthealth Corp

Given the investment horizon of 90 days Aethlon Medical is expected to generate 1.49 times more return on investment than Adapthealth Corp. However, Aethlon Medical is 1.49 times more volatile than Adapthealth Corp. It trades about 0.04 of its potential returns per unit of risk. Adapthealth Corp is currently generating about -0.03 per unit of risk. If you would invest  38.00  in Aethlon Medical on August 30, 2024 and sell it today you would earn a total of  2.00  from holding Aethlon Medical or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aethlon Medical  vs.  Adapthealth Corp

Aethlon Medical

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aethlon Medical are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain primary indicators, Aethlon Medical may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Adapthealth Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adapthealth Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Aethlon Medical and Adapthealth Corp

The main advantage of trading using opposite Aethlon Medical and Adapthealth Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aethlon Medical position performs unexpectedly, Adapthealth Corp 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 Adapthealth Corp will offset losses from the drop in Adapthealth Corp's long position.

The idea behind Aethlon Medical and Adapthealth Corp 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.

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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.