Correlation Between AptaBio Therapeutics and KM
Can any of the company-specific risk be diversified away by investing in both AptaBio Therapeutics and KM 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 KM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AptaBio Therapeutics and KM Corporation, you can compare the effects of market volatilities on AptaBio Therapeutics and KM 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 KM. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptaBio Therapeutics and KM.
Diversification Opportunities for AptaBio Therapeutics and KM
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AptaBio and KM is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding AptaBio Therapeutics and KM Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KM Corporation 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 KM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KM Corporation has no effect on the direction of AptaBio Therapeutics i.e., AptaBio Therapeutics and KM go up and down completely randomly.
Pair Corralation between AptaBio Therapeutics and KM
Assuming the 90 days trading horizon AptaBio Therapeutics is expected to generate 1.7 times more return on investment than KM. However, AptaBio Therapeutics is 1.7 times more volatile than KM Corporation. It trades about -0.01 of its potential returns per unit of risk. KM Corporation is currently generating about -0.05 per unit of risk. If you would invest 1,225,000 in AptaBio Therapeutics on September 12, 2024 and sell it today you would lose (611,000) from holding AptaBio Therapeutics or give up 49.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AptaBio Therapeutics vs. KM Corp.
Performance |
| Timeline |
| AptaBio Therapeutics |
| KM Corporation |
AptaBio Therapeutics and KM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AptaBio Therapeutics and KM
The main advantage of trading using opposite AptaBio Therapeutics and KM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptaBio Therapeutics position performs unexpectedly, KM 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 KM will offset losses from the drop in KM's long position.| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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