Correlation Between Apogee Therapeutics, and AETNA

Can any of the company-specific risk be diversified away by investing in both Apogee Therapeutics, and AETNA 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 AETNA 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 AETNA INC 7625, you can compare the effects of market volatilities on Apogee Therapeutics, and AETNA 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 AETNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Therapeutics, and AETNA.

Diversification Opportunities for Apogee Therapeutics, and AETNA

-0.6

Correlation Coefficient

Apogee Therapeutics,  AETNA

Excellent diversification

The 3 months correlation between Apogee and AETNA is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Therapeutics, Common and AETNA INC 7625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AETNA INC 7625 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 AETNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AETNA INC 7625 has no effect on the direction of Apogee Therapeutics, i.e., Apogee Therapeutics, and AETNA go up and down completely randomly.

Pair Corralation between Apogee Therapeutics, and AETNA

Given the investment horizon of 90 days Apogee Therapeutics, Common is expected to under-perform the AETNA. In addition to that, Apogee Therapeutics, is 3.44 times more volatile than AETNA INC 7625. It trades about -0.04 of its total potential returns per unit of risk. AETNA INC 7625 is currently generating about -0.02 per unit of volatility. If you would invest  10,354  in AETNA INC 7625 on December 23, 2024 and sell it today you would lose (125.00) from holding AETNA INC 7625 or give up 1.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	54.1%
Values	Daily Returns

Apogee Therapeutics, Common  vs.  AETNA INC 7625

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 weak 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.

AETNA INC 7625

Risk-Adjusted Performance

Very Weak

Over the last 90 days AETNA INC 7625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AETNA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Apogee Therapeutics, and AETNA

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

The idea behind Apogee Therapeutics, Common and AETNA INC 7625 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.