Correlation Between AptaBio Therapeutics and Raphas Co

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

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

Diversification Opportunities for AptaBio Therapeutics and Raphas Co

0.79

Correlation Coefficient

AptaBio Therapeutics  Raphas Co

Poor diversification

The 3 months correlation between AptaBio and Raphas is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding AptaBio Therapeutics and Raphas Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raphas Co 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 Raphas Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raphas Co has no effect on the direction of AptaBio Therapeutics i.e., AptaBio Therapeutics and Raphas Co go up and down completely randomly.

Pair Corralation between AptaBio Therapeutics and Raphas Co

Assuming the 90 days trading horizon AptaBio Therapeutics is expected to under-perform the Raphas Co. But the stock apears to be less risky and, when comparing its historical volatility, AptaBio Therapeutics is 1.64 times less risky than Raphas Co. The stock trades about -0.13 of its potential returns per unit of risk. The Raphas Co is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  2,130,000  in Raphas Co on September 16, 2024 and sell it today you would lose (544,000) from holding Raphas Co or give up 25.54% of portfolio value over 90 days.

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

AptaBio Therapeutics  vs.  Raphas 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.

Raphas Co

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raphas Co 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.

Pair Trading with AptaBio Therapeutics and Raphas Co

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

The idea behind AptaBio Therapeutics and Raphas 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.