Correlation Between AptarGroup and Avinger

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

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

Diversification Opportunities for AptarGroup and Avinger

-0.79

Correlation Coefficient

AptarGroup  Avinger

Pay attention - limited upside

The 3 months correlation between AptarGroup and Avinger is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding AptarGroup and Avinger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avinger and AptarGroup 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 AptarGroup are associated (or correlated) with Avinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avinger has no effect on the direction of AptarGroup i.e., AptarGroup and Avinger go up and down completely randomly.

Pair Corralation between AptarGroup and Avinger

Considering the 90-day investment horizon AptarGroup is expected to generate 0.16 times more return on investment than Avinger. However, AptarGroup is 6.24 times less risky than Avinger. It trades about 0.22 of its potential returns per unit of risk. Avinger is currently generating about -0.02 per unit of risk. If you would invest  15,033  in AptarGroup on September 4, 2024 and sell it today you would earn a total of  2,243  from holding AptarGroup or generate 14.92% return on investment over 90 days.

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

AptarGroup  vs.  Avinger

AptarGroup

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AptarGroup are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, AptarGroup reported solid returns over the last few months and may actually be approaching a breakup point.

Avinger

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avinger has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with AptarGroup and Avinger

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

The idea behind AptarGroup and Avinger 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.