Correlation Between ABVC Biopharma and Aptinyx

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

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

Diversification Opportunities for ABVC Biopharma and Aptinyx

0.4

Correlation Coefficient

ABVC Biopharma  Aptinyx

Very weak diversification

The 3 months correlation between ABVC and Aptinyx is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding ABVC Biopharma and Aptinyx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptinyx and ABVC Biopharma 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 ABVC Biopharma are associated (or correlated) with Aptinyx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptinyx has no effect on the direction of ABVC Biopharma i.e., ABVC Biopharma and Aptinyx go up and down completely randomly.

Pair Corralation between ABVC Biopharma and Aptinyx

Given the investment horizon of 90 days ABVC Biopharma is expected to generate 0.7 times more return on investment than Aptinyx. However, ABVC Biopharma is 1.42 times less risky than Aptinyx. It trades about -0.03 of its potential returns per unit of risk. Aptinyx is currently generating about -0.02 per unit of risk. If you would invest  710.00  in ABVC Biopharma on September 3, 2024 and sell it today you would lose (657.00) from holding ABVC Biopharma or give up 92.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	22.22%
Values	Daily Returns

ABVC Biopharma  vs.  Aptinyx

ABVC Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABVC Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Aptinyx

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ABVC Biopharma and Aptinyx

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

The idea behind ABVC Biopharma and Aptinyx 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.