Correlation Between CEL and Aptos

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

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

Diversification Opportunities for CEL and Aptos

0.46

Correlation Coefficient

CEL  Aptos

Very weak diversification

The 3 months correlation between CEL and Aptos is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CEL and Aptos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptos and CEL 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 CEL are associated (or correlated) with Aptos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptos has no effect on the direction of CEL i.e., CEL and Aptos go up and down completely randomly.

Pair Corralation between CEL and Aptos

Assuming the 90 days trading horizon CEL is expected to generate 3.34 times more return on investment than Aptos. However, CEL is 3.34 times more volatile than Aptos. It trades about 0.14 of its potential returns per unit of risk. Aptos is currently generating about 0.24 per unit of risk. If you would invest  15.00  in CEL on September 3, 2024 and sell it today you would earn a total of  14.00  from holding CEL or generate 93.33% return on investment over 90 days.

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

CEL  vs.  Aptos

CEL

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CEL are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, CEL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aptos

Risk-Adjusted Performance

18 of 100

Solid

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

Pair Trading with CEL and Aptos

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

The idea behind CEL and Aptos 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.