Correlation Between APT Medical and Linktel Technologies

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

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

Diversification Opportunities for APT Medical and Linktel Technologies

0.03

Correlation Coefficient

APT Medical  Linktel Technologies

Significant diversification

The 3 months correlation between APT and Linktel is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding APT Medical and Linktel Technologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linktel Technologies and APT Medical 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 APT Medical are associated (or correlated) with Linktel Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linktel Technologies has no effect on the direction of APT Medical i.e., APT Medical and Linktel Technologies go up and down completely randomly.

Pair Corralation between APT Medical and Linktel Technologies

Assuming the 90 days trading horizon APT Medical is expected to generate 2.03 times less return on investment than Linktel Technologies. But when comparing it to its historical volatility, APT Medical is 1.46 times less risky than Linktel Technologies. It trades about 0.06 of its potential returns per unit of risk. Linktel Technologies Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  5,663  in Linktel Technologies Co on October 26, 2024 and sell it today you would earn a total of  2,203  from holding Linktel Technologies Co or generate 38.9% return on investment over 90 days.

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

APT Medical  vs.  Linktel Technologies Co

APT Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days APT Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, APT Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Linktel Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Linktel Technologies Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Linktel Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with APT Medical and Linktel Technologies

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

The idea behind APT Medical and Linktel Technologies 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.