Correlation Between Insun Environment and Aprogen Healthcare

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

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

Diversification Opportunities for Insun Environment and Aprogen Healthcare

0.66

Correlation Coefficient

Insun Environment  Aprogen Healthcare

Poor diversification

The 3 months correlation between Insun and Aprogen is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Insun Environment New 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 Insun Environment 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 Insun Environment New 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 Insun Environment i.e., Insun Environment and Aprogen Healthcare go up and down completely randomly.

Pair Corralation between Insun Environment and Aprogen Healthcare

Assuming the 90 days trading horizon Insun Environment is expected to generate 2.78 times less return on investment than Aprogen Healthcare. But when comparing it to its historical volatility, Insun Environment New is 1.8 times less risky than Aprogen Healthcare. It trades about 0.11 of its potential returns per unit of risk. Aprogen Healthcare Games is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  47,500  in Aprogen Healthcare Games on September 23, 2024 and sell it today you would earn a total of  10,900  from holding Aprogen Healthcare Games or generate 22.95% return on investment over 90 days.

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

Insun Environment New  vs.  Aprogen Healthcare Games

Insun Environment New

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Insun Environment New has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Insun Environment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aprogen Healthcare Games

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aprogen Healthcare Games are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aprogen Healthcare may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Insun Environment and Aprogen Healthcare

The main advantage of trading using opposite Insun Environment and Aprogen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insun Environment 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 Insun Environment New 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..