Correlation Between AptaBio Therapeutics and Webzen
Can any of the company-specific risk be diversified away by investing in both AptaBio Therapeutics and Webzen 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 Webzen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AptaBio Therapeutics and Webzen Inc, you can compare the effects of market volatilities on AptaBio Therapeutics and Webzen 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 Webzen. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptaBio Therapeutics and Webzen.
Diversification Opportunities for AptaBio Therapeutics and Webzen
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AptaBio and Webzen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding AptaBio Therapeutics and Webzen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webzen Inc 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 Webzen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Webzen Inc has no effect on the direction of AptaBio Therapeutics i.e., AptaBio Therapeutics and Webzen go up and down completely randomly.
Pair Corralation between AptaBio Therapeutics and Webzen
Assuming the 90 days trading horizon AptaBio Therapeutics is expected to generate 2.27 times more return on investment than Webzen. However, AptaBio Therapeutics is 2.27 times more volatile than Webzen Inc. It trades about 0.02 of its potential returns per unit of risk. Webzen Inc is currently generating about -0.02 per unit of risk. If you would invest 689,000 in AptaBio Therapeutics on August 29, 2024 and sell it today you would lose (32,000) from holding AptaBio Therapeutics or give up 4.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.5% |
| Values | Daily Returns |
AptaBio Therapeutics vs. Webzen Inc
Performance |
| Timeline |
| AptaBio Therapeutics |
| Webzen Inc |
AptaBio Therapeutics and Webzen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AptaBio Therapeutics and Webzen
The main advantage of trading using opposite AptaBio Therapeutics and Webzen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptaBio Therapeutics position performs unexpectedly, Webzen 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 Webzen will offset losses from the drop in Webzen's long position.| AptaBio Therapeutics vs. ABL Bio | AptaBio Therapeutics vs. OliX PharmaceuticalsInc | AptaBio Therapeutics vs. Oscotec | AptaBio Therapeutics vs. Busan Industrial Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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