Correlation Between Harvard Bioscience and AptarGroup

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

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

Diversification Opportunities for Harvard Bioscience and AptarGroup

0.75

Correlation Coefficient

Harvard Bioscience  AptarGroup

Poor diversification

The 3 months correlation between Harvard and AptarGroup is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Harvard Bioscience and AptarGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptarGroup and Harvard Bioscience 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 Harvard Bioscience 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 Harvard Bioscience i.e., Harvard Bioscience and AptarGroup go up and down completely randomly.

Pair Corralation between Harvard Bioscience and AptarGroup

Given the investment horizon of 90 days Harvard Bioscience is expected to under-perform the AptarGroup. In addition to that, Harvard Bioscience is 2.98 times more volatile than AptarGroup. It trades about -0.42 of its total potential returns per unit of risk. AptarGroup is currently generating about -0.06 per unit of volatility. If you would invest  15,628  in AptarGroup on December 30, 2024 and sell it today you would lose (935.00) from holding AptarGroup or give up 5.98% of portfolio value over 90 days.

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

Harvard Bioscience  vs.  AptarGroup

Harvard Bioscience

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harvard Bioscience has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

AptarGroup

Risk-Adjusted Performance

Very Weak

Over the last 90 days AptarGroup has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, AptarGroup is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Harvard Bioscience and AptarGroup

The main advantage of trading using opposite Harvard Bioscience and AptarGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvard Bioscience 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 Harvard Bioscience 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.