Correlation Between Sirona Biochem and Aptose Biosciences

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

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

Diversification Opportunities for Sirona Biochem and Aptose Biosciences

0.26

Correlation Coefficient

Sirona Biochem  Aptose Biosciences

Modest diversification

The 3 months correlation between Sirona and Aptose is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sirona Biochem Corp and Aptose Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptose Biosciences and Sirona Biochem 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 Sirona Biochem Corp are associated (or correlated) with Aptose Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptose Biosciences has no effect on the direction of Sirona Biochem i.e., Sirona Biochem and Aptose Biosciences go up and down completely randomly.

Pair Corralation between Sirona Biochem and Aptose Biosciences

Assuming the 90 days horizon Sirona Biochem is expected to generate 3.82 times less return on investment than Aptose Biosciences. But when comparing it to its historical volatility, Sirona Biochem Corp is 1.34 times less risky than Aptose Biosciences. It trades about 0.06 of its potential returns per unit of risk. Aptose Biosciences is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  25.00  in Aptose Biosciences on September 27, 2024 and sell it today you would earn a total of  12.00  from holding Aptose Biosciences or generate 48.0% return on investment over 90 days.

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

Sirona Biochem Corp  vs.  Aptose Biosciences

Sirona Biochem Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Aptose Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aptose Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Sirona Biochem and Aptose Biosciences

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

The idea behind Sirona Biochem Corp and Aptose Biosciences 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.