Correlation Between Sky Century and Aequus Pharmaceuticals

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

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

Diversification Opportunities for Sky Century and Aequus Pharmaceuticals

0.29

Correlation Coefficient

Sky Century  Aequus Pharmaceuticals

Modest diversification

The 3 months correlation between Sky and Aequus is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sky Century Investment and Aequus Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aequus Pharmaceuticals and Sky Century 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 Sky Century Investment are associated (or correlated) with Aequus Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aequus Pharmaceuticals has no effect on the direction of Sky Century i.e., Sky Century and Aequus Pharmaceuticals go up and down completely randomly.

Pair Corralation between Sky Century and Aequus Pharmaceuticals

Given the investment horizon of 90 days Sky Century is expected to generate 1.07 times less return on investment than Aequus Pharmaceuticals. But when comparing it to its historical volatility, Sky Century Investment is 1.64 times less risky than Aequus Pharmaceuticals. It trades about 0.31 of its potential returns per unit of risk. Aequus Pharmaceuticals is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  0.39  in Aequus Pharmaceuticals on October 20, 2024 and sell it today you would earn a total of  0.28  from holding Aequus Pharmaceuticals or generate 71.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Sky Century Investment  vs.  Aequus Pharmaceuticals

Sky Century Investment

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sky Century Investment are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Sky Century demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Aequus Pharmaceuticals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aequus Pharmaceuticals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Aequus Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sky Century and Aequus Pharmaceuticals

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

The idea behind Sky Century Investment and Aequus Pharmaceuticals 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.