Correlation Between Aprogen Healthcare and SCI Information

Can any of the company-specific risk be diversified away by investing in both Aprogen Healthcare and SCI Information 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 SCI Information 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 SCI Information Service, you can compare the effects of market volatilities on Aprogen Healthcare and SCI Information 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 SCI Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aprogen Healthcare and SCI Information.

Diversification Opportunities for Aprogen Healthcare and SCI Information

0.63

Correlation Coefficient

Aprogen Healthcare  SCI Information

Poor diversification

The 3 months correlation between Aprogen and SCI is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games and SCI Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Information Service 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 SCI Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Information Service has no effect on the direction of Aprogen Healthcare i.e., Aprogen Healthcare and SCI Information go up and down completely randomly.

Pair Corralation between Aprogen Healthcare and SCI Information

Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to under-perform the SCI Information. In addition to that, Aprogen Healthcare is 3.44 times more volatile than SCI Information Service. It trades about -0.02 of its total potential returns per unit of risk. SCI Information Service is currently generating about 0.27 per unit of volatility. If you would invest  205,500  in SCI Information Service on September 27, 2024 and sell it today you would earn a total of  25,500  from holding SCI Information Service or generate 12.41% return on investment over 90 days.

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

Aprogen Healthcare Games  vs.  SCI Information Service

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.

SCI Information Service

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCI Information Service has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Aprogen Healthcare and SCI Information

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

The idea behind Aprogen Healthcare Games and SCI Information Service 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 Anywhere module to track or share privately all of your investments from the convenience of any device.