Correlation Between Aprogen Healthcare and Prestige Biologics

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

Diversification Opportunities for Aprogen Healthcare and Prestige Biologics

0.26

Correlation Coefficient

Aprogen Healthcare  Prestige Biologics

Modest diversification

The 3 months correlation between Aprogen and Prestige is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games and Prestige Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prestige Biologics 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 Prestige Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prestige Biologics has no effect on the direction of Aprogen Healthcare i.e., Aprogen Healthcare and Prestige Biologics go up and down completely randomly.

Pair Corralation between Aprogen Healthcare and Prestige Biologics

Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to generate 1.24 times more return on investment than Prestige Biologics. However, Aprogen Healthcare is 1.24 times more volatile than Prestige Biologics Co. It trades about 0.01 of its potential returns per unit of risk. Prestige Biologics Co is currently generating about -0.16 per unit of risk. If you would invest  54,800  in Aprogen Healthcare Games on October 23, 2024 and sell it today you would lose (2,600) from holding Aprogen Healthcare Games or give up 4.74% 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.  Prestige Biologics Co

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.

Prestige Biologics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prestige Biologics Co 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Aprogen Healthcare and Prestige Biologics

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

The idea behind Aprogen Healthcare Games and Prestige Biologics Co 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.