Correlation Between Aptitude Software and Futura Medical

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

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

Diversification Opportunities for Aptitude Software and Futura Medical

0.59

Correlation Coefficient

Aptitude Software  Futura Medical

Very weak diversification

The 3 months correlation between Aptitude and Futura is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aptitude Software Group and Futura Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futura Medical and Aptitude Software 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 Aptitude Software Group are associated (or correlated) with Futura Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futura Medical has no effect on the direction of Aptitude Software i.e., Aptitude Software and Futura Medical go up and down completely randomly.

Pair Corralation between Aptitude Software and Futura Medical

Assuming the 90 days trading horizon Aptitude Software Group is expected to generate 0.34 times more return on investment than Futura Medical. However, Aptitude Software Group is 2.98 times less risky than Futura Medical. It trades about -0.14 of its potential returns per unit of risk. Futura Medical is currently generating about -0.22 per unit of risk. If you would invest  34,000  in Aptitude Software Group on December 25, 2024 and sell it today you would lose (6,400) from holding Aptitude Software Group or give up 18.82% of portfolio value over 90 days.

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

Aptitude Software Group  vs.  Futura Medical

Aptitude Software

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aptitude Software Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Futura Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Futura Medical 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 Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Aptitude Software and Futura Medical

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

The idea behind Aptitude Software Group and Futura Medical 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..