Correlation Between Affluent Medical and Sogeclair

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

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

Diversification Opportunities for Affluent Medical and Sogeclair

0.26

Correlation Coefficient

Affluent Medical  Sogeclair

Modest diversification

The 3 months correlation between Affluent and Sogeclair is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and Sogeclair SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sogeclair SA and Affluent 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 Affluent Medical SAS are associated (or correlated) with Sogeclair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sogeclair SA has no effect on the direction of Affluent Medical i.e., Affluent Medical and Sogeclair go up and down completely randomly.

Pair Corralation between Affluent Medical and Sogeclair

Assuming the 90 days trading horizon Affluent Medical SAS is expected to under-perform the Sogeclair. In addition to that, Affluent Medical is 2.23 times more volatile than Sogeclair SA. It trades about -0.09 of its total potential returns per unit of risk. Sogeclair SA is currently generating about -0.02 per unit of volatility. If you would invest  1,945  in Sogeclair SA on September 14, 2024 and sell it today you would lose (65.00) from holding Sogeclair SA or give up 3.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Affluent Medical SAS  vs.  Sogeclair SA

Affluent Medical SAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Affluent Medical SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sogeclair SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sogeclair SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Sogeclair is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Affluent Medical and Sogeclair

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

The idea behind Affluent Medical SAS and Sogeclair SA 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.