Correlation Between KNOTUS CoLtd and AptaBio Therapeutics
Can any of the company-specific risk be diversified away by investing in both KNOTUS CoLtd 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 KNOTUS CoLtd and AptaBio Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KNOTUS CoLtd and AptaBio Therapeutics, you can compare the effects of market volatilities on KNOTUS CoLtd 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 KNOTUS CoLtd with a short position of AptaBio Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOTUS CoLtd and AptaBio Therapeutics.
Diversification Opportunities for KNOTUS CoLtd and AptaBio Therapeutics
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KNOTUS and AptaBio is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding KNOTUS CoLtd and AptaBio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptaBio Therapeutics and KNOTUS CoLtd 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 KNOTUS CoLtd 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 KNOTUS CoLtd i.e., KNOTUS CoLtd and AptaBio Therapeutics go up and down completely randomly.
Pair Corralation between KNOTUS CoLtd and AptaBio Therapeutics
Assuming the 90 days trading horizon KNOTUS CoLtd is expected to generate 1.4 times less return on investment than AptaBio Therapeutics. But when comparing it to its historical volatility, KNOTUS CoLtd is 1.99 times less risky than AptaBio Therapeutics. It trades about 0.1 of its potential returns per unit of risk. AptaBio Therapeutics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 703,000 in AptaBio Therapeutics on December 8, 2024 and sell it today you would earn a total of 34,000 from holding AptaBio Therapeutics or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNOTUS CoLtd vs. AptaBio Therapeutics
Performance |
| Timeline |
| KNOTUS CoLtd |
| AptaBio Therapeutics |
KNOTUS CoLtd and AptaBio Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOTUS CoLtd and AptaBio Therapeutics
The main advantage of trading using opposite KNOTUS CoLtd and AptaBio Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOTUS CoLtd 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.| KNOTUS CoLtd vs. Heungkuk Metaltech CoLtd | ||
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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