Correlation Between Nasdaq and Apollomics

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

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

Diversification Opportunities for Nasdaq and Apollomics

-0.22

Correlation Coefficient

Nasdaq  Apollomics

Very good diversification

The 3 months correlation between Nasdaq and Apollomics is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Apollomics Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollomics Class A and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Apollomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollomics Class A has no effect on the direction of Nasdaq i.e., Nasdaq and Apollomics go up and down completely randomly.

Pair Corralation between Nasdaq and Apollomics

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the Apollomics. But the stock apears to be less risky and, when comparing its historical volatility, Nasdaq Inc is 5.02 times less risky than Apollomics. The stock trades about -0.01 of its potential returns per unit of risk. The Apollomics Class A is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  949.00  in Apollomics Class A on December 21, 2024 and sell it today you would earn a total of  41.00  from holding Apollomics Class A or generate 4.32% return on investment over 90 days.

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

Nasdaq Inc  vs.  Apollomics Class A

Nasdaq Inc

Risk-Adjusted Performance

Very Weak

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

Apollomics Class A

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apollomics Class A are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Apollomics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nasdaq and Apollomics

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

The idea behind Nasdaq Inc and Apollomics Class A 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.