Correlation Between Nan Ya and Apex Biotechnology
Can any of the company-specific risk be diversified away by investing in both Nan Ya and Apex Biotechnology 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 Nan Ya and Apex Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nan Ya Plastics and Apex Biotechnology Corp, you can compare the effects of market volatilities on Nan Ya and Apex Biotechnology 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 Nan Ya with a short position of Apex Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nan Ya and Apex Biotechnology.
Diversification Opportunities for Nan Ya and Apex Biotechnology
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nan and Apex is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Nan Ya Plastics and Apex Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Biotechnology Corp and Nan Ya 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 Nan Ya Plastics are associated (or correlated) with Apex Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Biotechnology Corp has no effect on the direction of Nan Ya i.e., Nan Ya and Apex Biotechnology go up and down completely randomly.
Pair Corralation between Nan Ya and Apex Biotechnology
Assuming the 90 days trading horizon Nan Ya Plastics is expected to under-perform the Apex Biotechnology. In addition to that, Nan Ya is 1.16 times more volatile than Apex Biotechnology Corp. It trades about -0.11 of its total potential returns per unit of risk. Apex Biotechnology Corp is currently generating about -0.01 per unit of volatility. If you would invest 3,385 in Apex Biotechnology Corp on December 11, 2024 and sell it today you would lose (250.00) from holding Apex Biotechnology Corp or give up 7.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nan Ya Plastics vs. Apex Biotechnology Corp
Performance |
| Timeline |
| Nan Ya Plastics |
| Apex Biotechnology Corp |
Nan Ya and Apex Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nan Ya and Apex Biotechnology
The main advantage of trading using opposite Nan Ya and Apex Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nan Ya position performs unexpectedly, Apex Biotechnology 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 Apex Biotechnology will offset losses from the drop in Apex Biotechnology's long position.| Nan Ya vs. Formosa Plastics Corp | ||
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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