Correlation Between MEDS Old and Apexigen

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

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

Diversification Opportunities for MEDS Old and Apexigen

-0.36

Correlation Coefficient

MEDS Old  Apexigen

Very good diversification

The 3 months correlation between MEDS and Apexigen is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding MEDS Old and Apexigen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apexigen and MEDS Old 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 MEDS Old are associated (or correlated) with Apexigen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apexigen has no effect on the direction of MEDS Old i.e., MEDS Old and Apexigen go up and down completely randomly.

Pair Corralation between MEDS Old and Apexigen

Given the investment horizon of 90 days MEDS Old is expected to generate 1.3 times more return on investment than Apexigen. However, MEDS Old is 1.3 times more volatile than Apexigen. It trades about 0.07 of its potential returns per unit of risk. Apexigen is currently generating about -0.07 per unit of risk. If you would invest  271.00  in MEDS Old on October 12, 2024 and sell it today you would earn a total of  475.00  from holding MEDS Old or generate 175.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	29.88%
Values	Daily Returns

MEDS Old  vs.  Apexigen

MEDS Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDS Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, MEDS Old is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Apexigen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apexigen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Apexigen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with MEDS Old and Apexigen

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

The idea behind MEDS Old and Apexigen 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.