Correlation Between AptaBio Therapeutics and Nam Hwa
Can any of the company-specific risk be diversified away by investing in both AptaBio Therapeutics and Nam Hwa 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 Nam Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AptaBio Therapeutics and Nam Hwa Construction, you can compare the effects of market volatilities on AptaBio Therapeutics and Nam Hwa 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 Nam Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptaBio Therapeutics and Nam Hwa.
Diversification Opportunities for AptaBio Therapeutics and Nam Hwa
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AptaBio and Nam is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding AptaBio Therapeutics and Nam Hwa Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nam Hwa Construction 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 Nam Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nam Hwa Construction has no effect on the direction of AptaBio Therapeutics i.e., AptaBio Therapeutics and Nam Hwa go up and down completely randomly.
Pair Corralation between AptaBio Therapeutics and Nam Hwa
Assuming the 90 days trading horizon AptaBio Therapeutics is expected to under-perform the Nam Hwa. In addition to that, AptaBio Therapeutics is 1.37 times more volatile than Nam Hwa Construction. It trades about -0.08 of its total potential returns per unit of risk. Nam Hwa Construction is currently generating about 0.05 per unit of volatility. If you would invest 388,265 in Nam Hwa Construction on October 5, 2024 and sell it today you would earn a total of 6,235 from holding Nam Hwa Construction or generate 1.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
AptaBio Therapeutics vs. Nam Hwa Construction
Performance |
Timeline |
AptaBio Therapeutics |
Nam Hwa Construction |
AptaBio Therapeutics and Nam Hwa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AptaBio Therapeutics and Nam Hwa
The main advantage of trading using opposite AptaBio Therapeutics and Nam Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptaBio Therapeutics position performs unexpectedly, Nam Hwa 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 Nam Hwa will offset losses from the drop in Nam Hwa's long position.AptaBio Therapeutics vs. ABL Bio | AptaBio Therapeutics vs. Helixmith Co | AptaBio Therapeutics vs. OliX PharmaceuticalsInc | AptaBio Therapeutics vs. Oscotec |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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