Correlation Between Retractable Technologies and AptarGroup

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

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

Diversification Opportunities for Retractable Technologies and AptarGroup

-0.68

Correlation Coefficient

Retractable Technologies  AptarGroup

Excellent diversification

The 3 months correlation between Retractable and AptarGroup is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Retractable Technologies and AptarGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptarGroup and Retractable Technologies 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 Retractable Technologies 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 Retractable Technologies i.e., Retractable Technologies and AptarGroup go up and down completely randomly.

Pair Corralation between Retractable Technologies and AptarGroup

Considering the 90-day investment horizon Retractable Technologies is expected to under-perform the AptarGroup. In addition to that, Retractable Technologies is 2.65 times more volatile than AptarGroup. It trades about -0.04 of its total potential returns per unit of risk. AptarGroup is currently generating about 0.05 per unit of volatility. If you would invest  11,461  in AptarGroup on November 20, 2024 and sell it today you would earn a total of  3,018  from holding AptarGroup or generate 26.33% return on investment over 90 days.

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

Retractable Technologies  vs.  AptarGroup

Retractable Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Retractable Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Retractable Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

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 unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Retractable Technologies and AptarGroup

The main advantage of trading using opposite Retractable Technologies and AptarGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retractable Technologies 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 Retractable Technologies 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.