Correlation Between Aptos and IDEX

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

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

Diversification Opportunities for Aptos and IDEX

0.72

Correlation Coefficient

Aptos  IDEX

Poor diversification

The 3 months correlation between Aptos and IDEX is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aptos and IDEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEX 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 IDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEX has no effect on the direction of Aptos i.e., Aptos and IDEX go up and down completely randomly.

Pair Corralation between Aptos and IDEX

Assuming the 90 days trading horizon Aptos is expected to under-perform the IDEX. But the crypto coin apears to be less risky and, when comparing its historical volatility, Aptos is 1.3 times less risky than IDEX. The crypto coin trades about -0.19 of its potential returns per unit of risk. The IDEX is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  4.59  in IDEX on November 27, 2024 and sell it today you would lose (1.29) from holding IDEX or give up 28.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Aptos  vs.  IDEX

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.

IDEX

Risk-Adjusted Performance

Very Weak

Over the last 90 days IDEX 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 fundamental 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 IDEX shareholders.

Pair Trading with Aptos and IDEX

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

The idea behind Aptos and IDEX 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.

Check out your portfolio center.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.