Correlation Between ISU Chemical and AptaBio Therapeutics
Can any of the company-specific risk be diversified away by investing in both ISU Chemical and AptaBio Therapeutics 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 ISU Chemical and AptaBio Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ISU Chemical Co and AptaBio Therapeutics, you can compare the effects of market volatilities on ISU Chemical and AptaBio Therapeutics 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 ISU Chemical with a short position of AptaBio Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISU Chemical and AptaBio Therapeutics.
Diversification Opportunities for ISU Chemical and AptaBio Therapeutics
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ISU and AptaBio is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ISU Chemical Co and AptaBio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptaBio Therapeutics and ISU Chemical 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 ISU Chemical Co are associated (or correlated) with AptaBio Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AptaBio Therapeutics has no effect on the direction of ISU Chemical i.e., ISU Chemical and AptaBio Therapeutics go up and down completely randomly.
Pair Corralation between ISU Chemical and AptaBio Therapeutics
Assuming the 90 days trading horizon ISU Chemical is expected to generate 160.18 times less return on investment than AptaBio Therapeutics. But when comparing it to its historical volatility, ISU Chemical Co is 1.5 times less risky than AptaBio Therapeutics. It trades about 0.0 of its potential returns per unit of risk. AptaBio Therapeutics is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 630,000 in AptaBio Therapeutics on October 24, 2024 and sell it today you would earn a total of 73,000 from holding AptaBio Therapeutics or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ISU Chemical Co vs. AptaBio Therapeutics
Performance |
| Timeline |
| ISU Chemical |
| AptaBio Therapeutics |
ISU Chemical and AptaBio Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISU Chemical and AptaBio Therapeutics
The main advantage of trading using opposite ISU Chemical and AptaBio Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISU Chemical position performs unexpectedly, AptaBio Therapeutics 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 AptaBio Therapeutics will offset losses from the drop in AptaBio Therapeutics' long position.| ISU Chemical vs. FNSTech Co | ISU Chemical vs. Kbi Metal Co | ISU Chemical vs. Wonbang Tech Co | ISU Chemical vs. Hanjoo Light Metal |
| AptaBio Therapeutics vs. ABL Bio | AptaBio Therapeutics vs. Helixmith Co | AptaBio Therapeutics vs. OliX PharmaceuticalsInc | AptaBio Therapeutics vs. Oscotec |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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