Correlation Between AptaBio Therapeutics and Sajo Seafood
Can any of the company-specific risk be diversified away by investing in both AptaBio Therapeutics and Sajo Seafood 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 AptaBio Therapeutics and Sajo Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AptaBio Therapeutics and Sajo Seafood, you can compare the effects of market volatilities on AptaBio Therapeutics and Sajo Seafood 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 AptaBio Therapeutics with a short position of Sajo Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptaBio Therapeutics and Sajo Seafood.
Diversification Opportunities for AptaBio Therapeutics and Sajo Seafood
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AptaBio and Sajo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AptaBio Therapeutics and Sajo Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sajo Seafood and AptaBio Therapeutics 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 AptaBio Therapeutics are associated (or correlated) with Sajo Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sajo Seafood has no effect on the direction of AptaBio Therapeutics i.e., AptaBio Therapeutics and Sajo Seafood go up and down completely randomly.
Pair Corralation between AptaBio Therapeutics and Sajo Seafood
Assuming the 90 days trading horizon AptaBio Therapeutics is expected to generate 1.47 times less return on investment than Sajo Seafood. But when comparing it to its historical volatility, AptaBio Therapeutics is 2.05 times less risky than Sajo Seafood. It trades about 0.22 of its potential returns per unit of risk. Sajo Seafood is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 462,500 in Sajo Seafood on October 28, 2024 and sell it today you would earn a total of 89,500 from holding Sajo Seafood or generate 19.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AptaBio Therapeutics vs. Sajo Seafood
Performance |
| Timeline |
| AptaBio Therapeutics |
| Sajo Seafood |
AptaBio Therapeutics and Sajo Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AptaBio Therapeutics and Sajo Seafood
The main advantage of trading using opposite AptaBio Therapeutics and Sajo Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptaBio Therapeutics position performs unexpectedly, Sajo Seafood 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 Sajo Seafood will offset losses from the drop in Sajo Seafood's long position.| AptaBio Therapeutics vs. ABL Bio | AptaBio Therapeutics vs. Helixmith Co | AptaBio Therapeutics vs. OliX PharmaceuticalsInc | AptaBio Therapeutics vs. Oscotec |
| Sajo Seafood vs. Busan Industrial Co | Sajo Seafood vs. Busan Ind | Sajo Seafood vs. RPBio Inc | Sajo Seafood vs. Finebesteel |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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