Correlation Between Kolon Plastics and AptaBio Therapeutics
Can any of the company-specific risk be diversified away by investing in both Kolon Plastics 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 Kolon Plastics and AptaBio Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Plastics and AptaBio Therapeutics, you can compare the effects of market volatilities on Kolon Plastics 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 Kolon Plastics with a short position of AptaBio Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Plastics and AptaBio Therapeutics.
Diversification Opportunities for Kolon Plastics and AptaBio Therapeutics
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kolon and AptaBio is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Plastics and AptaBio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptaBio Therapeutics and Kolon Plastics 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 Kolon Plastics 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 Kolon Plastics i.e., Kolon Plastics and AptaBio Therapeutics go up and down completely randomly.
Pair Corralation between Kolon Plastics and AptaBio Therapeutics
Assuming the 90 days trading horizon Kolon Plastics is expected to generate 0.56 times more return on investment than AptaBio Therapeutics. However, Kolon Plastics is 1.77 times less risky than AptaBio Therapeutics. It trades about -0.09 of its potential returns per unit of risk. AptaBio Therapeutics is currently generating about -0.08 per unit of risk. If you would invest 747,000 in Kolon Plastics on October 15, 2024 and sell it today you would lose (189,000) from holding Kolon Plastics or give up 25.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kolon Plastics vs. AptaBio Therapeutics
Performance |
| Timeline |
| Kolon Plastics |
| AptaBio Therapeutics |
Kolon Plastics and AptaBio Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolon Plastics and AptaBio Therapeutics
The main advantage of trading using opposite Kolon Plastics and AptaBio Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Plastics 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.| Kolon Plastics vs. CU Medical Systems | Kolon Plastics vs. Green Cross Medical | Kolon Plastics vs. BIT Computer Co | Kolon Plastics vs. System and Application |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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