Correlation Between AptarGroup and Repro Med

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

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

Diversification Opportunities for AptarGroup and Repro Med

0.6

Correlation Coefficient

AptarGroup  Repro Med

Poor diversification

The 3 months correlation between AptarGroup and Repro is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding AptarGroup and Repro Med Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repro Med Systems 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 Repro Med. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repro Med Systems has no effect on the direction of AptarGroup i.e., AptarGroup and Repro Med go up and down completely randomly.

Pair Corralation between AptarGroup and Repro Med

Considering the 90-day investment horizon AptarGroup is expected to generate 2.06 times less return on investment than Repro Med. But when comparing it to its historical volatility, AptarGroup is 3.61 times less risky than Repro Med. It trades about 0.13 of its potential returns per unit of risk. Repro Med Systems is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  238.00  in Repro Med Systems on September 3, 2024 and sell it today you would earn a total of  160.00  from holding Repro Med Systems or generate 67.23% return on investment over 90 days.

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

AptarGroup  vs.  Repro Med Systems

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.

Repro Med Systems

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Repro Med Systems are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Repro Med exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AptarGroup and Repro Med

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

The idea behind AptarGroup and Repro Med Systems 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.