Correlation Between Apellis Pharmaceuticals and Quantum BioPharma

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

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

Diversification Opportunities for Apellis Pharmaceuticals and Quantum BioPharma

-0.56

Correlation Coefficient

Apellis Pharmaceuticals  Quantum BioPharma

Excellent diversification

The 3 months correlation between Apellis and Quantum is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Apellis Pharmaceuticals and Quantum BioPharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum BioPharma and Apellis Pharmaceuticals 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 Apellis Pharmaceuticals are associated (or correlated) with Quantum BioPharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum BioPharma has no effect on the direction of Apellis Pharmaceuticals i.e., Apellis Pharmaceuticals and Quantum BioPharma go up and down completely randomly.

Pair Corralation between Apellis Pharmaceuticals and Quantum BioPharma

Given the investment horizon of 90 days Apellis Pharmaceuticals is expected to generate 0.27 times more return on investment than Quantum BioPharma. However, Apellis Pharmaceuticals is 3.75 times less risky than Quantum BioPharma. It trades about -0.03 of its potential returns per unit of risk. Quantum BioPharma is currently generating about -0.04 per unit of risk. If you would invest  4,301  in Apellis Pharmaceuticals on October 9, 2024 and sell it today you would lose (863.00) from holding Apellis Pharmaceuticals or give up 20.07% of portfolio value over 90 days.

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

Apellis Pharmaceuticals  vs.  Quantum BioPharma

Apellis Pharmaceuticals

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apellis Pharmaceuticals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Apellis Pharmaceuticals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Quantum BioPharma

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum BioPharma are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Quantum BioPharma may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Apellis Pharmaceuticals and Quantum BioPharma

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

The idea behind Apellis Pharmaceuticals and Quantum BioPharma 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.