Correlation Between Neogen and Aperture Health

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

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

Diversification Opportunities for Neogen and Aperture Health

0.0

Correlation Coefficient

Neogen  Aperture Health

Pay attention - limited upside

The 3 months correlation between Neogen and Aperture is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Neogen and Aperture Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aperture Health and Neogen 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 Neogen are associated (or correlated) with Aperture Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aperture Health has no effect on the direction of Neogen i.e., Neogen and Aperture Health go up and down completely randomly.

Pair Corralation between Neogen and Aperture Health

Given the investment horizon of 90 days Neogen is expected to under-perform the Aperture Health. But the stock apears to be less risky and, when comparing its historical volatility, Neogen is 5.56 times less risky than Aperture Health. The stock trades about -0.02 of its potential returns per unit of risk. The Aperture Health is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Aperture Health on October 11, 2024 and sell it today you would lose (6.10) from holding Aperture Health or give up 50.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Neogen  vs.  Aperture Health

Neogen

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Neogen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Aperture Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aperture Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Aperture Health is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Neogen and Aperture Health

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

The idea behind Neogen and Aperture Health 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .