Correlation Between Apex Biotechnology and Giant Manufacturing
Can any of the company-specific risk be diversified away by investing in both Apex Biotechnology and Giant Manufacturing 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 Apex Biotechnology and Giant Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apex Biotechnology Corp and Giant Manufacturing Co, you can compare the effects of market volatilities on Apex Biotechnology and Giant Manufacturing 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 Apex Biotechnology with a short position of Giant Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apex Biotechnology and Giant Manufacturing.
Diversification Opportunities for Apex Biotechnology and Giant Manufacturing
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apex and Giant is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Apex Biotechnology Corp and Giant Manufacturing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giant Manufacturing and Apex Biotechnology 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 Apex Biotechnology Corp are associated (or correlated) with Giant Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giant Manufacturing has no effect on the direction of Apex Biotechnology i.e., Apex Biotechnology and Giant Manufacturing go up and down completely randomly.
Pair Corralation between Apex Biotechnology and Giant Manufacturing
Assuming the 90 days trading horizon Apex Biotechnology Corp is expected to generate 0.45 times more return on investment than Giant Manufacturing. However, Apex Biotechnology Corp is 2.23 times less risky than Giant Manufacturing. It trades about -0.13 of its potential returns per unit of risk. Giant Manufacturing Co is currently generating about -0.43 per unit of risk. If you would invest 2,935 in Apex Biotechnology Corp on August 29, 2024 and sell it today you would lose (80.00) from holding Apex Biotechnology Corp or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apex Biotechnology Corp vs. Giant Manufacturing Co
Performance |
| Timeline |
| Apex Biotechnology Corp |
| Giant Manufacturing |
Apex Biotechnology and Giant Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apex Biotechnology and Giant Manufacturing
The main advantage of trading using opposite Apex Biotechnology and Giant Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apex Biotechnology position performs unexpectedly, Giant Manufacturing 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 Giant Manufacturing will offset losses from the drop in Giant Manufacturing's long position.| Apex Biotechnology vs. Grape King Bio | Apex Biotechnology vs. Standard Chemical Pharmaceutical | Apex Biotechnology vs. China Steel Chemical | Apex Biotechnology vs. Sinphar Pharmaceutical Co |
| Giant Manufacturing vs. Merida Industry Co | Giant Manufacturing vs. President Chain Store | Giant Manufacturing vs. Cheng Shin Rubber | Giant Manufacturing vs. Uni President Enterprises Corp |
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.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |