Correlation Between AptaBio Therapeutics and Visang Education

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

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

Diversification Opportunities for AptaBio Therapeutics and Visang Education

-0.04

Correlation Coefficient

AptaBio Therapeutics  Visang Education

Good diversification

The 3 months correlation between AptaBio and Visang is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding AptaBio Therapeutics and Visang Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visang Education 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 Visang Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visang Education has no effect on the direction of AptaBio Therapeutics i.e., AptaBio Therapeutics and Visang Education go up and down completely randomly.

Pair Corralation between AptaBio Therapeutics and Visang Education

Assuming the 90 days trading horizon AptaBio Therapeutics is expected to generate 1.13 times more return on investment than Visang Education. However, AptaBio Therapeutics is 1.13 times more volatile than Visang Education. It trades about 0.11 of its potential returns per unit of risk. Visang Education is currently generating about 0.06 per unit of risk. If you would invest  652,000  in AptaBio Therapeutics on November 29, 2024 and sell it today you would earn a total of  148,000  from holding AptaBio Therapeutics or generate 22.7% 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.  Visang Education

AptaBio Therapeutics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AptaBio Therapeutics are ranked lower than 8 (%) 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.

Visang Education

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Visang Education are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Visang Education sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AptaBio Therapeutics and Visang Education

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

The idea behind AptaBio Therapeutics and Visang Education 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.