Correlation Between Knight Therapeutics and Aptose Biosciences
Can any of the company-specific risk be diversified away by investing in both Knight Therapeutics and Aptose Biosciences 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 Knight Therapeutics and Aptose Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knight Therapeutics and Aptose Biosciences, you can compare the effects of market volatilities on Knight Therapeutics and Aptose Biosciences 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 Knight Therapeutics with a short position of Aptose Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Therapeutics and Aptose Biosciences.
Diversification Opportunities for Knight Therapeutics and Aptose Biosciences
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Knight and Aptose is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Knight Therapeutics and Aptose Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptose Biosciences and Knight Therapeutics 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 Knight Therapeutics are associated (or correlated) with Aptose Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptose Biosciences has no effect on the direction of Knight Therapeutics i.e., Knight Therapeutics and Aptose Biosciences go up and down completely randomly.
Pair Corralation between Knight Therapeutics and Aptose Biosciences
Assuming the 90 days trading horizon Knight Therapeutics is expected to generate 302.6 times less return on investment than Aptose Biosciences. But when comparing it to its historical volatility, Knight Therapeutics is 125.69 times less risky than Aptose Biosciences. It trades about 0.06 of its potential returns per unit of risk. Aptose Biosciences is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 33.00 in Aptose Biosciences on December 2, 2024 and sell it today you would earn a total of 403.00 from holding Aptose Biosciences or generate 1221.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Knight Therapeutics vs. Aptose Biosciences
Performance |
Timeline |
Knight Therapeutics |
Aptose Biosciences |
Knight Therapeutics and Aptose Biosciences Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Knight Therapeutics and Aptose Biosciences
The main advantage of trading using opposite Knight Therapeutics and Aptose Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Therapeutics position performs unexpectedly, Aptose Biosciences 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 Aptose Biosciences will offset losses from the drop in Aptose Biosciences' long position.Knight Therapeutics vs. Stella Jones | Knight Therapeutics vs. Richelieu Hardware | Knight Therapeutics vs. Element Fleet Management | Knight Therapeutics vs. ECN Capital Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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