Correlation Between PLAYWITH and Aprogen Healthcare

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

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

Diversification Opportunities for PLAYWITH and Aprogen Healthcare

0.87

Correlation Coefficient

PLAYWITH  Aprogen Healthcare

Very poor diversification

The 3 months correlation between PLAYWITH and Aprogen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding PLAYWITH and Aprogen Healthcare Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aprogen Healthcare Games and PLAYWITH 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 PLAYWITH are associated (or correlated) with Aprogen Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aprogen Healthcare Games has no effect on the direction of PLAYWITH i.e., PLAYWITH and Aprogen Healthcare go up and down completely randomly.

Pair Corralation between PLAYWITH and Aprogen Healthcare

Assuming the 90 days trading horizon PLAYWITH is expected to under-perform the Aprogen Healthcare. In addition to that, PLAYWITH is 1.05 times more volatile than Aprogen Healthcare Games. It trades about -0.28 of its total potential returns per unit of risk. Aprogen Healthcare Games is currently generating about -0.08 per unit of volatility. If you would invest  65,000  in Aprogen Healthcare Games on September 13, 2024 and sell it today you would lose (14,200) from holding Aprogen Healthcare Games or give up 21.85% of portfolio value over 90 days.

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

PLAYWITH  vs.  Aprogen Healthcare Games

PLAYWITH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PLAYWITH 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.

Aprogen Healthcare Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aprogen Healthcare Games 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.

Pair Trading with PLAYWITH and Aprogen Healthcare

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

The idea behind PLAYWITH and Aprogen Healthcare Games 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.