Correlation Between AptaBio Therapeutics and GS Retail

Can any of the company-specific risk be diversified away by investing in both AptaBio Therapeutics and GS Retail 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 AptaBio Therapeutics and GS Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AptaBio Therapeutics and GS Retail Co, you can compare the effects of market volatilities on AptaBio Therapeutics and GS Retail 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 AptaBio Therapeutics with a short position of GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptaBio Therapeutics and GS Retail.

Diversification Opportunities for AptaBio Therapeutics and GS Retail

0.14

Correlation Coefficient

AptaBio Therapeutics  GS Retail

Average diversification

The 3 months correlation between AptaBio and 007070 is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding AptaBio Therapeutics and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail and AptaBio Therapeutics 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 AptaBio Therapeutics are associated (or correlated) with GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of AptaBio Therapeutics i.e., AptaBio Therapeutics and GS Retail go up and down completely randomly.

Pair Corralation between AptaBio Therapeutics and GS Retail

Assuming the 90 days trading horizon AptaBio Therapeutics is expected to under-perform the GS Retail. In addition to that, AptaBio Therapeutics is 2.04 times more volatile than GS Retail Co. It trades about -0.17 of its total potential returns per unit of risk. GS Retail Co is currently generating about 0.07 per unit of volatility. If you would invest  2,160,000  in GS Retail Co on September 2, 2024 and sell it today you would earn a total of  155,000  from holding GS Retail Co or generate 7.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

AptaBio Therapeutics  vs.  GS Retail Co

AptaBio Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AptaBio Therapeutics 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

GS Retail

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GS Retail Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GS Retail may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with AptaBio Therapeutics and GS Retail

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

The idea behind AptaBio Therapeutics and GS Retail 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.