Correlation Between Advanced Accelerator and Universal Health

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

By analyzing existing cross correlation between Advanced Accelerator Applications and Universal Health Services, you can compare the effects of market volatilities on Advanced Accelerator and Universal Health 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 Advanced Accelerator with a short position of Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Accelerator and Universal Health.

Diversification Opportunities for Advanced Accelerator and Universal Health

0.0

Correlation Coefficient

Advanced Accelerator  Universal Health

Pay attention - limited upside

The 3 months correlation between Advanced and Universal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Accelerator Applicati and Universal Health Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Services and Advanced Accelerator 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 Advanced Accelerator Applications are associated (or correlated) with Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Services has no effect on the direction of Advanced Accelerator i.e., Advanced Accelerator and Universal Health go up and down completely randomly.

Pair Corralation between Advanced Accelerator and Universal Health

If you would invest (100.00) in Advanced Accelerator Applications on January 17, 2024 and sell it today you would earn a total of  100.00  from holding Advanced Accelerator Applications or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Advanced Accelerator Applicati  vs.  Universal Health Services

Advanced Accelerator

Risk-Adjusted Performance

0 of 100

Very Weak

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

Universal Health Services

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Health Services are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical indicators, Universal Health may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Advanced Accelerator and Universal Health

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

The idea behind Advanced Accelerator Applications and Universal Health Services 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.