Correlation Between Aptos and BF

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

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

Diversification Opportunities for Aptos and BF

0.18

Correlation Coefficient

Aptos  BF

Average diversification

The 3 months correlation between Aptos and BF is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aptos and BF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BF and Aptos 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 Aptos are associated (or correlated) with BF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BF has no effect on the direction of Aptos i.e., Aptos and BF go up and down completely randomly.

Pair Corralation between Aptos and BF

Assuming the 90 days trading horizon Aptos is expected to under-perform the BF. In addition to that, Aptos is 2.49 times more volatile than BF. It trades about -0.2 of its total potential returns per unit of risk. BF is currently generating about -0.05 per unit of volatility. If you would invest  0.29  in BF on November 28, 2024 and sell it today you would lose (0.03) from holding BF or give up 8.99% of portfolio value over 90 days.

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

Aptos  vs.  BF

Aptos

Risk-Adjusted Performance

Very Weak

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

BF

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Aptos and BF

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

The idea behind Aptos and BF 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.