Correlation Between Yang Ming and Apex Biotechnology

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

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

Diversification Opportunities for Yang Ming and Apex Biotechnology

-0.03

Correlation Coefficient

Yang Ming  Apex Biotechnology

Good diversification

The 3 months correlation between Yang and Apex is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine 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 Yang Ming 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 Yang Ming Marine 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 Yang Ming i.e., Yang Ming and Apex Biotechnology go up and down completely randomly.

Pair Corralation between Yang Ming and Apex Biotechnology

Assuming the 90 days trading horizon Yang Ming is expected to generate 13.57 times less return on investment than Apex Biotechnology. In addition to that, Yang Ming is 1.75 times more volatile than Apex Biotechnology Corp. It trades about 0.01 of its total potential returns per unit of risk. Apex Biotechnology Corp is currently generating about 0.21 per unit of volatility. If you would invest  2,980  in Apex Biotechnology Corp on December 29, 2024 and sell it today you would earn a total of  375.00  from holding Apex Biotechnology Corp or generate 12.58% return on investment over 90 days.

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

Yang Ming Marine  vs.  Apex Biotechnology Corp

Yang Ming Marine

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yang Ming Marine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Yang Ming 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

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apex Biotechnology Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Apex Biotechnology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yang Ming and Apex Biotechnology

The main advantage of trading using opposite Yang Ming and Apex Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming 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 Yang Ming Marine 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.