Correlation Between Aptose Biosciences and Equillium

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Can any of the company-specific risk be diversified away by investing in both Aptose Biosciences and Equillium 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 Aptose Biosciences and Equillium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptose Biosciences and Equillium, you can compare the effects of market volatilities on Aptose Biosciences and Equillium 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 Aptose Biosciences with a short position of Equillium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptose Biosciences and Equillium.

Diversification Opportunities for Aptose Biosciences and Equillium

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Aptose and Equillium is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aptose Biosciences and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium and Aptose Biosciences 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 Aptose Biosciences are associated (or correlated) with Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of Aptose Biosciences i.e., Aptose Biosciences and Equillium go up and down completely randomly.

Pair Corralation between Aptose Biosciences and Equillium

Given the investment horizon of 90 days Aptose Biosciences is expected to under-perform the Equillium. But the stock apears to be less risky and, when comparing its historical volatility, Aptose Biosciences is 1.05 times less risky than Equillium. The stock trades about -0.12 of its potential returns per unit of risk. The Equillium is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  278.00  in Equillium on October 22, 2024 and sell it today you would lose (214.00) from holding Equillium or give up 76.98% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Aptose Biosciences  vs.  Equillium

 Performance 
       Timeline  
Aptose Biosciences 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Aptose Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
Equillium 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Equillium has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Aptose Biosciences and Equillium Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aptose Biosciences and Equillium

The main advantage of trading using opposite Aptose Biosciences and Equillium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptose Biosciences position performs unexpectedly, Equillium 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 Equillium will offset losses from the drop in Equillium's long position.
The idea behind Aptose Biosciences and Equillium 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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