Correlation Between Grape King and Apex Biotechnology

Can any of the company-specific risk be diversified away by investing in both Grape King and Apex Biotechnology 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 Grape King and Apex Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grape King Bio and Apex Biotechnology Corp, you can compare the effects of market volatilities on Grape King and Apex Biotechnology 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 Grape King with a short position of Apex Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grape King and Apex Biotechnology.

Diversification Opportunities for Grape King and Apex Biotechnology

-0.66

Correlation Coefficient

Grape King  Apex Biotechnology

Excellent diversification

The 3 months correlation between Grape and Apex is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Grape King Bio and Apex Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Biotechnology Corp and Grape King 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 Grape King Bio are associated (or correlated) with Apex Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Biotechnology Corp has no effect on the direction of Grape King i.e., Grape King and Apex Biotechnology go up and down completely randomly.

Pair Corralation between Grape King and Apex Biotechnology

Assuming the 90 days trading horizon Grape King Bio is expected to under-perform the Apex Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Grape King Bio is 1.46 times less risky than Apex Biotechnology. The stock trades about -0.03 of its potential returns per unit of risk. The Apex Biotechnology Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,590  in Apex Biotechnology Corp on December 2, 2024 and sell it today you would earn a total of  495.00  from holding Apex Biotechnology Corp or generate 19.11% return on investment over 90 days.

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

Grape King Bio  vs.  Apex Biotechnology Corp

Grape King Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grape King Bio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Grape King is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Apex Biotechnology Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apex Biotechnology Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Apex Biotechnology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Grape King and Apex Biotechnology

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

The idea behind Grape King Bio and Apex Biotechnology Corp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.