Correlation Between Medy Tox and AptaBio Therapeutics
Can any of the company-specific risk be diversified away by investing in both Medy Tox 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 Medy Tox and AptaBio Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medy Tox and AptaBio Therapeutics, you can compare the effects of market volatilities on Medy Tox 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 Medy Tox with a short position of AptaBio Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medy Tox and AptaBio Therapeutics.
Diversification Opportunities for Medy Tox and AptaBio Therapeutics
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Medy and AptaBio is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Medy Tox and AptaBio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptaBio Therapeutics and Medy Tox 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 Medy Tox 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 Medy Tox i.e., Medy Tox and AptaBio Therapeutics go up and down completely randomly.
Pair Corralation between Medy Tox and AptaBio Therapeutics
Assuming the 90 days trading horizon Medy Tox is expected to generate 1.38 times more return on investment than AptaBio Therapeutics. However, Medy Tox is 1.38 times more volatile than AptaBio Therapeutics. It trades about -0.01 of its potential returns per unit of risk. AptaBio Therapeutics is currently generating about -0.05 per unit of risk. If you would invest 12,900,000 in Medy Tox on September 13, 2024 and sell it today you would lose (410,000) from holding Medy Tox or give up 3.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medy Tox vs. AptaBio Therapeutics
Performance |
| Timeline |
| Medy Tox |
| AptaBio Therapeutics |
Medy Tox and AptaBio Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medy Tox and AptaBio Therapeutics
The main advantage of trading using opposite Medy Tox and AptaBio Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medy Tox 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.| Medy Tox vs. Samsung Electronics Co | Medy Tox vs. Samsung Electronics Co | Medy Tox vs. SK Hynix | Medy Tox vs. SK Holdings Co |
| AptaBio Therapeutics vs. KNOTUS CoLtd | AptaBio Therapeutics vs. Bridge Biotherapeutics | AptaBio Therapeutics vs. Cytogen | AptaBio Therapeutics vs. Genolution |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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