Correlation Between AptaBio Therapeutics and MetaLabs

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

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

Diversification Opportunities for AptaBio Therapeutics and MetaLabs

0.09

Correlation Coefficient

AptaBio Therapeutics  MetaLabs

Significant diversification

The 3 months correlation between AptaBio and MetaLabs is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding AptaBio Therapeutics and MetaLabs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaLabs 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 MetaLabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetaLabs has no effect on the direction of AptaBio Therapeutics i.e., AptaBio Therapeutics and MetaLabs go up and down completely randomly.

Pair Corralation between AptaBio Therapeutics and MetaLabs

Assuming the 90 days trading horizon AptaBio Therapeutics is expected to generate 2.1 times more return on investment than MetaLabs. However, AptaBio Therapeutics is 2.1 times more volatile than MetaLabs Co. It trades about 0.07 of its potential returns per unit of risk. MetaLabs Co is currently generating about 0.1 per unit of risk. If you would invest  626,000  in AptaBio Therapeutics on December 25, 2024 and sell it today you would earn a total of  77,000  from holding AptaBio Therapeutics or generate 12.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.25%
Values	Daily Returns

AptaBio Therapeutics  vs.  MetaLabs Co

AptaBio Therapeutics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AptaBio Therapeutics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, AptaBio Therapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

MetaLabs

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MetaLabs Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MetaLabs may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with AptaBio Therapeutics and MetaLabs

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

The idea behind AptaBio Therapeutics and MetaLabs 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.