Correlation Between Apollomics and Fate Therapeutics

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

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

Diversification Opportunities for Apollomics and Fate Therapeutics

0.53

Correlation Coefficient

Apollomics  Fate Therapeutics

Very weak diversification

The 3 months correlation between Apollomics and Fate is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Apollomics Class A and Fate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fate Therapeutics and Apollomics 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 Apollomics Class A are associated (or correlated) with Fate Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fate Therapeutics has no effect on the direction of Apollomics i.e., Apollomics and Fate Therapeutics go up and down completely randomly.

Pair Corralation between Apollomics and Fate Therapeutics

Given the investment horizon of 90 days Apollomics Class A is expected to generate 1.39 times more return on investment than Fate Therapeutics. However, Apollomics is 1.39 times more volatile than Fate Therapeutics. It trades about 0.19 of its potential returns per unit of risk. Fate Therapeutics is currently generating about -0.24 per unit of risk. If you would invest  816.00  in Apollomics Class A on September 27, 2024 and sell it today you would earn a total of  309.00  from holding Apollomics Class A or generate 37.87% return on investment over 90 days.

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

Apollomics Class A  vs.  Fate Therapeutics

Apollomics Class A

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apollomics Class A are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Apollomics displayed solid returns over the last few months and may actually be approaching a breakup point.

Fate Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fate Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Apollomics and Fate Therapeutics

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

The idea behind Apollomics Class A and Fate Therapeutics 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.