Correlation Between Aprogen Healthcare and Dongwon System

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

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

Diversification Opportunities for Aprogen Healthcare and Dongwon System

0.24

Correlation Coefficient

Aprogen Healthcare  Dongwon System

Modest diversification

The 3 months correlation between Aprogen and Dongwon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games and Dongwon System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon System and Aprogen Healthcare 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 Aprogen Healthcare Games are associated (or correlated) with Dongwon System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon System has no effect on the direction of Aprogen Healthcare i.e., Aprogen Healthcare and Dongwon System go up and down completely randomly.

Pair Corralation between Aprogen Healthcare and Dongwon System

Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to generate 1.42 times more return on investment than Dongwon System. However, Aprogen Healthcare is 1.42 times more volatile than Dongwon System. It trades about 0.0 of its potential returns per unit of risk. Dongwon System is currently generating about -0.02 per unit of risk. If you would invest  54,100  in Aprogen Healthcare Games on September 30, 2024 and sell it today you would lose (3,900) from holding Aprogen Healthcare Games or give up 7.21% of portfolio value over 90 days.

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

Aprogen Healthcare Games  vs.  Dongwon System

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 somewhat strong basic indicators, Aprogen Healthcare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dongwon System

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aprogen Healthcare and Dongwon System

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

The idea behind Aprogen Healthcare Games and Dongwon System 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.