Correlation Between Aperture Health and SSMTF

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

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

Diversification Opportunities for Aperture Health and SSMTF

1.0

Correlation Coefficient

Aperture Health  SSMTF

No risk reduction

The 3 months correlation between Aperture and SSMTF is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Aperture Health and SSMTF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSMTF and Aperture Health 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 Aperture Health are associated (or correlated) with SSMTF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSMTF has no effect on the direction of Aperture Health i.e., Aperture Health and SSMTF go up and down completely randomly.

Pair Corralation between Aperture Health and SSMTF

If you would invest  0.15  in SSMTF on October 26, 2024 and sell it today you would earn a total of  0.00  from holding SSMTF or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	52.38%
Values	Daily Returns

Aperture Health  vs.  SSMTF

Aperture Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aperture Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Aperture Health is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

SSMTF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSMTF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SSMTF is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Aperture Health and SSMTF

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

The idea behind Aperture Health and SSMTF 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.