Correlation Between SUN and Aptos

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

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

Diversification Opportunities for SUN and Aptos

0.95

Correlation Coefficient

SUN  Aptos

Almost no diversification

The 3 months correlation between SUN and Aptos is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SUN and Aptos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptos and SUN 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 SUN are associated (or correlated) with Aptos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptos has no effect on the direction of SUN i.e., SUN and Aptos go up and down completely randomly.

Pair Corralation between SUN and Aptos

Assuming the 90 days trading horizon SUN is expected to generate 0.92 times more return on investment than Aptos. However, SUN is 1.08 times less risky than Aptos. It trades about -0.11 of its potential returns per unit of risk. Aptos is currently generating about -0.11 per unit of risk. If you would invest  2.45  in SUN on December 28, 2024 and sell it today you would lose (0.82) from holding SUN or give up 33.47% of portfolio value over 90 days.

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

SUN  vs.  Aptos

SUN

Risk-Adjusted Performance

Very Weak

Over the last 90 days SUN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for SUN shareholders.

Aptos

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aptos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Aptos shareholders.

Pair Trading with SUN and Aptos

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

The idea behind SUN and Aptos 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.