Correlation Between Public Service and Aptamer Group

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

By analyzing existing cross correlation between Public Service Enterprise and Aptamer Group PLC, you can compare the effects of market volatilities on Public Service and Aptamer Group 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 Public Service with a short position of Aptamer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Service and Aptamer Group.

Diversification Opportunities for Public Service and Aptamer Group

-0.09

Correlation Coefficient

Public Service  Aptamer Group

Good diversification

The 3 months correlation between Public and Aptamer is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Public Service Enterprise and Aptamer Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptamer Group PLC and Public Service 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 Public Service Enterprise are associated (or correlated) with Aptamer Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptamer Group PLC has no effect on the direction of Public Service i.e., Public Service and Aptamer Group go up and down completely randomly.

Pair Corralation between Public Service and Aptamer Group

Assuming the 90 days trading horizon Public Service Enterprise is expected to under-perform the Aptamer Group. But the stock apears to be less risky and, when comparing its historical volatility, Public Service Enterprise is 5.14 times less risky than Aptamer Group. The stock trades about -0.32 of its potential returns per unit of risk. The Aptamer Group PLC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  32.00  in Aptamer Group PLC on September 24, 2024 and sell it today you would earn a total of  3.00  from holding Aptamer Group PLC or generate 9.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Public Service Enterprise  vs.  Aptamer Group PLC

Public Service Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Public Service Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Public Service is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Aptamer Group PLC

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aptamer Group PLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Aptamer Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Public Service and Aptamer Group

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

The idea behind Public Service Enterprise and Aptamer Group PLC 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.