Correlation Between Venus Concept and American Shared

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

By analyzing existing cross correlation between Venus Concept and American Shared Hospital, you can compare the effects of market volatilities on Venus Concept and American Shared 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 Venus Concept with a short position of American Shared. Check out your portfolio center. Please also check ongoing floating volatility patterns of Venus Concept and American Shared.

Diversification Opportunities for Venus Concept and American Shared

-0.25

Correlation Coefficient

Venus Concept  American Shared

Very good diversification

The 3 months correlation between Venus and American is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Venus Concept and American Shared Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shared Hospital and Venus Concept 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 Venus Concept are associated (or correlated) with American Shared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shared Hospital has no effect on the direction of Venus Concept i.e., Venus Concept and American Shared go up and down completely randomly.

Pair Corralation between Venus Concept and American Shared

Given the investment horizon of 90 days Venus Concept is expected to under-perform the American Shared. In addition to that, Venus Concept is 3.4 times more volatile than American Shared Hospital. It trades about -0.02 of its total potential returns per unit of risk. American Shared Hospital is currently generating about 0.02 per unit of volatility. If you would invest  288.00  in American Shared Hospital on September 30, 2024 and sell it today you would earn a total of  31.00  from holding American Shared Hospital or generate 10.76% return on investment over 90 days.

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

Venus Concept  vs.  American Shared Hospital

Venus Concept

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Venus Concept has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

American Shared Hospital

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in American Shared Hospital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent primary indicators, American Shared may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Venus Concept and American Shared

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

The idea behind Venus Concept and American Shared Hospital 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..