Correlation Between Baxter International and AptarGroup

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

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

Diversification Opportunities for Baxter International and AptarGroup

-0.82

Correlation Coefficient

Baxter International  AptarGroup

Pay attention - limited upside

The 3 months correlation between Baxter and AptarGroup is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Baxter International and AptarGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptarGroup and Baxter International 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 Baxter International are associated (or correlated) with AptarGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AptarGroup has no effect on the direction of Baxter International i.e., Baxter International and AptarGroup go up and down completely randomly.

Pair Corralation between Baxter International and AptarGroup

Considering the 90-day investment horizon Baxter International is expected to under-perform the AptarGroup. In addition to that, Baxter International is 1.48 times more volatile than AptarGroup. It trades about -0.18 of its total potential returns per unit of risk. AptarGroup is currently generating about 0.1 per unit of volatility. If you would invest  16,826  in AptarGroup on September 5, 2024 and sell it today you would earn a total of  414.00  from holding AptarGroup or generate 2.46% return on investment over 90 days.

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

Baxter International  vs.  AptarGroup

Baxter International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baxter International 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 basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

AptarGroup

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AptarGroup are ranked lower than 16 (%) 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.

Pair Trading with Baxter International and AptarGroup

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

The idea behind Baxter International and AptarGroup 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.