Correlation Between Aptose Biosciences and Histogen

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

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

Diversification Opportunities for Aptose Biosciences and Histogen

0.74

Correlation Coefficient

Aptose Biosciences  Histogen

Poor diversification

The 3 months correlation between Aptose and Histogen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Aptose Biosciences and Histogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Histogen 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 Histogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Histogen has no effect on the direction of Aptose Biosciences i.e., Aptose Biosciences and Histogen go up and down completely randomly.

Pair Corralation between Aptose Biosciences and Histogen

Given the investment horizon of 90 days Aptose Biosciences is expected to under-perform the Histogen. In addition to that, Aptose Biosciences is 2.07 times more volatile than Histogen. It trades about -0.1 of its total potential returns per unit of risk. Histogen is currently generating about 0.06 per unit of volatility. If you would invest  2.60  in Histogen on December 29, 2024 and sell it today you would earn a total of  0.10  from holding Histogen or generate 3.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	32.79%
Values	Daily Returns

Aptose Biosciences  vs.  Histogen

Aptose Biosciences

Risk-Adjusted Performance

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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Histogen

Risk-Adjusted Performance

Modest

Over the last 90 days Histogen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak basic indicators, Histogen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aptose Biosciences and Histogen

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

The idea behind Aptose Biosciences and Histogen 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.