Correlation Between GFPT Public and AAPICO Hitech

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

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

Diversification Opportunities for GFPT Public and AAPICO Hitech

0.95

Correlation Coefficient

GFPT Public  AAPICO Hitech

Almost no diversification

The 3 months correlation between GFPT and AAPICO is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding GFPT Public and AAPICO Hitech Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAPICO Hitech Public and GFPT Public 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 GFPT Public are associated (or correlated) with AAPICO Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAPICO Hitech Public has no effect on the direction of GFPT Public i.e., GFPT Public and AAPICO Hitech go up and down completely randomly.

Pair Corralation between GFPT Public and AAPICO Hitech

Assuming the 90 days trading horizon GFPT Public is expected to generate 0.47 times more return on investment than AAPICO Hitech. However, GFPT Public is 2.13 times less risky than AAPICO Hitech. It trades about -0.41 of its potential returns per unit of risk. AAPICO Hitech Public is currently generating about -0.2 per unit of risk. If you would invest  1,070  in GFPT Public on October 9, 2024 and sell it today you would lose (105.00) from holding GFPT Public or give up 9.81% of portfolio value over 90 days.

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

GFPT Public  vs.  AAPICO Hitech Public

GFPT Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GFPT Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

AAPICO Hitech Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AAPICO Hitech Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with GFPT Public and AAPICO Hitech

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

The idea behind GFPT Public and AAPICO Hitech Public 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.