Correlation Between Wonbang Tech and AptaBio Therapeutics
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech 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 Wonbang Tech and AptaBio Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonbang Tech Co and AptaBio Therapeutics, you can compare the effects of market volatilities on Wonbang Tech 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 Wonbang Tech with a short position of AptaBio Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and AptaBio Therapeutics.
Diversification Opportunities for Wonbang Tech and AptaBio Therapeutics
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wonbang and AptaBio is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and AptaBio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptaBio Therapeutics and Wonbang Tech 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 Wonbang Tech 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 Wonbang Tech i.e., Wonbang Tech and AptaBio Therapeutics go up and down completely randomly.
Pair Corralation between Wonbang Tech and AptaBio Therapeutics
Assuming the 90 days trading horizon Wonbang Tech is expected to generate 4.33 times less return on investment than AptaBio Therapeutics. But when comparing it to its historical volatility, Wonbang Tech Co is 1.26 times less risky than AptaBio Therapeutics. It trades about 0.01 of its potential returns per unit of risk. AptaBio Therapeutics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 712,000 in AptaBio Therapeutics on November 3, 2024 and sell it today you would lose (18,000) from holding AptaBio Therapeutics or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. AptaBio Therapeutics
Performance |
| Timeline |
| Wonbang Tech |
| AptaBio Therapeutics |
Wonbang Tech and AptaBio Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and AptaBio Therapeutics
The main advantage of trading using opposite Wonbang Tech and AptaBio Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech 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.| Wonbang Tech vs. Seohee Construction Co | Wonbang Tech vs. MediaZen | Wonbang Tech vs. Tuksu Engineering ConstructionLtd | Wonbang Tech vs. SEOJEON ELECTRIC MACHINERY |
| AptaBio Therapeutics vs. ABL Bio | 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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