Correlation Between Digital Power and AptaBio Therapeutics
Can any of the company-specific risk be diversified away by investing in both Digital Power 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 Digital Power and AptaBio Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Power Communications and AptaBio Therapeutics, you can compare the effects of market volatilities on Digital Power 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 Digital Power with a short position of AptaBio Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Power and AptaBio Therapeutics.
Diversification Opportunities for Digital Power and AptaBio Therapeutics
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Digital and AptaBio is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Digital Power Communications and AptaBio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptaBio Therapeutics and Digital Power 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 Digital Power Communications 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 Digital Power i.e., Digital Power and AptaBio Therapeutics go up and down completely randomly.
Pair Corralation between Digital Power and AptaBio Therapeutics
Assuming the 90 days trading horizon Digital Power Communications is expected to generate 0.74 times more return on investment than AptaBio Therapeutics. However, Digital Power Communications is 1.35 times less risky than AptaBio Therapeutics. It trades about 0.14 of its potential returns per unit of risk. AptaBio Therapeutics is currently generating about -0.34 per unit of risk. If you would invest 809,000 in Digital Power Communications on September 4, 2024 and sell it today you would earn a total of 53,000 from holding Digital Power Communications or generate 6.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Power Communications vs. AptaBio Therapeutics
Performance |
| Timeline |
| Digital Power Commun |
| AptaBio Therapeutics |
Digital Power and AptaBio Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Power and AptaBio Therapeutics
The main advantage of trading using opposite Digital Power and AptaBio Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Power 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.| Digital Power vs. AptaBio Therapeutics | Digital Power vs. Daewoo SBI SPAC | Digital Power vs. Dream Security co | Digital Power vs. Microfriend |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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