Correlation Between Apogee Therapeutics, and Discover Financial

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

By analyzing existing cross correlation between Apogee Therapeutics, Common and Discover Financial Services, you can compare the effects of market volatilities on Apogee Therapeutics, and Discover Financial 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 Apogee Therapeutics, with a short position of Discover Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Therapeutics, and Discover Financial.

Diversification Opportunities for Apogee Therapeutics, and Discover Financial

-0.35

Correlation Coefficient

Apogee Therapeutics,  Discover Financial

Very good diversification

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

Pair Corralation between Apogee Therapeutics, and Discover Financial

Given the investment horizon of 90 days Apogee Therapeutics, Common is expected to under-perform the Discover Financial. In addition to that, Apogee Therapeutics, is 1.74 times more volatile than Discover Financial Services. It trades about -0.03 of its total potential returns per unit of risk. Discover Financial Services is currently generating about -0.01 per unit of volatility. If you would invest  17,185  in Discover Financial Services on December 28, 2024 and sell it today you would lose (571.00) from holding Discover Financial Services or give up 3.32% of portfolio value over 90 days.

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

Apogee Therapeutics, Common  vs.  Discover Financial Services

Apogee Therapeutics,

Risk-Adjusted Performance

Very Weak

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

Discover Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Discover Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Discover Financial is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Apogee Therapeutics, and Discover Financial

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

The idea behind Apogee Therapeutics, Common and Discover Financial Services 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.