Correlation Between Power Wind and Apex Biotechnology

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

By analyzing existing cross correlation between Power Wind Health and Apex Biotechnology Corp, you can compare the effects of market volatilities on Power Wind and Apex Biotechnology 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 Power Wind with a short position of Apex Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Wind and Apex Biotechnology.

Diversification Opportunities for Power Wind and Apex Biotechnology

-0.35

Correlation Coefficient

Power Wind  Apex Biotechnology

Very good diversification

The 3 months correlation between Power and Apex is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Power Wind Health and Apex Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Biotechnology Corp and Power Wind 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 Power Wind Health are associated (or correlated) with Apex Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Biotechnology Corp has no effect on the direction of Power Wind i.e., Power Wind and Apex Biotechnology go up and down completely randomly.

Pair Corralation between Power Wind and Apex Biotechnology

Assuming the 90 days trading horizon Power Wind Health is expected to under-perform the Apex Biotechnology. In addition to that, Power Wind is 1.13 times more volatile than Apex Biotechnology Corp. It trades about -0.08 of its total potential returns per unit of risk. Apex Biotechnology Corp is currently generating about 0.18 per unit of volatility. If you would invest  2,900  in Apex Biotechnology Corp on October 20, 2024 and sell it today you would earn a total of  105.00  from holding Apex Biotechnology Corp or generate 3.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Power Wind Health  vs.  Apex Biotechnology Corp

Power Wind Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Power Wind Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Power Wind is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Apex Biotechnology Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apex Biotechnology Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Apex Biotechnology is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Power Wind and Apex Biotechnology

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

The idea behind Power Wind Health and Apex Biotechnology Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.