Correlation Between AptaBio Therapeutics and Microfriend
Can any of the company-specific risk be diversified away by investing in both AptaBio Therapeutics and Microfriend 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 Microfriend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AptaBio Therapeutics and Microfriend, you can compare the effects of market volatilities on AptaBio Therapeutics and Microfriend 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 Microfriend. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptaBio Therapeutics and Microfriend.
Diversification Opportunities for AptaBio Therapeutics and Microfriend
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between AptaBio and Microfriend is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding AptaBio Therapeutics and Microfriend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microfriend 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 Microfriend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microfriend has no effect on the direction of AptaBio Therapeutics i.e., AptaBio Therapeutics and Microfriend go up and down completely randomly.
Pair Corralation between AptaBio Therapeutics and Microfriend
Assuming the 90 days trading horizon AptaBio Therapeutics is expected to under-perform the Microfriend. In addition to that, AptaBio Therapeutics is 1.18 times more volatile than Microfriend. It trades about -0.02 of its total potential returns per unit of risk. Microfriend is currently generating about -0.01 per unit of volatility. If you would invest 497,000 in Microfriend on August 24, 2024 and sell it today you would lose (184,500) from holding Microfriend or give up 37.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AptaBio Therapeutics vs. Microfriend
Performance |
| Timeline |
| AptaBio Therapeutics |
| Microfriend |
AptaBio Therapeutics and Microfriend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AptaBio Therapeutics and Microfriend
The main advantage of trading using opposite AptaBio Therapeutics and Microfriend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptaBio Therapeutics position performs unexpectedly, Microfriend 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 Microfriend will offset losses from the drop in Microfriend's long position.| AptaBio Therapeutics vs. ABL Bio | AptaBio Therapeutics vs. Helixmith Co | AptaBio Therapeutics vs. OliX PharmaceuticalsInc | AptaBio Therapeutics vs. Oscotec |
| Microfriend vs. Pyung Hwa Industrial | Microfriend vs. Cheryong Industrial CoLtd | Microfriend vs. Daiyang Metal Co | Microfriend vs. Kukil Metal 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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