Correlation Between Cooper Companies and Aesthetic Medical
Can any of the company-specific risk be diversified away by investing in both Cooper Companies 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 Cooper Companies and Aesthetic Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Cooper Companies and Aesthetic Medical Intl, you can compare the effects of market volatilities on Cooper Companies 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 Cooper Companies with a short position of Aesthetic Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Companies and Aesthetic Medical.
Diversification Opportunities for Cooper Companies and Aesthetic Medical
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cooper and Aesthetic is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding The Cooper Companies 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 Cooper Companies 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 The Cooper Companies 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 Cooper Companies i.e., Cooper Companies and Aesthetic Medical go up and down completely randomly.
Pair Corralation between Cooper Companies and Aesthetic Medical
Considering the 90-day investment horizon The Cooper Companies is expected to generate 0.2 times more return on investment than Aesthetic Medical. However, The Cooper Companies is 4.91 times less risky than Aesthetic Medical. It trades about -0.07 of its potential returns per unit of risk. Aesthetic Medical Intl is currently generating about -0.04 per unit of risk. If you would invest 9,451 in The Cooper Companies on January 29, 2024 and sell it today you would lose (567.00) from holding The Cooper Companies or give up 6.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
The Cooper Companies vs. Aesthetic Medical Intl
Performance |
Timeline |
Cooper Companies |
Aesthetic Medical Intl |
Cooper Companies and Aesthetic Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cooper Companies and Aesthetic Medical
The main advantage of trading using opposite Cooper Companies and Aesthetic Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cooper Companies 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.Cooper Companies vs. West Pharmaceutical Services | Cooper Companies vs. Hologic | Cooper Companies vs. ICU Medical | Cooper Companies vs. Haemonetics |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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