Correlation Between Aptos and DF

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

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

Diversification Opportunities for Aptos and DF

0.78

Correlation Coefficient

Aptos  DF

Poor diversification

The 3 months correlation between Aptos and DF is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aptos and DF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DF 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 DF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DF has no effect on the direction of Aptos i.e., Aptos and DF go up and down completely randomly.

Pair Corralation between Aptos and DF

Assuming the 90 days trading horizon Aptos is expected to generate 1.47 times more return on investment than DF. However, Aptos is 1.47 times more volatile than DF. It trades about 0.18 of its potential returns per unit of risk. DF is currently generating about 0.08 per unit of risk. If you would invest  630.00  in Aptos on September 12, 2024 and sell it today you would earn a total of  538.00  from holding Aptos or generate 85.4% return on investment over 90 days.

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

Aptos  vs.  DF

Aptos

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aptos are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Aptos exhibited solid returns over the last few months and may actually be approaching a breakup point.

DF

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DF are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, DF exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aptos and DF

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

The idea behind Aptos and DF 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.