Correlation Between AptaBio Therapeutics and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both AptaBio Therapeutics and Cube Entertainment 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 Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AptaBio Therapeutics and Cube Entertainment, you can compare the effects of market volatilities on AptaBio Therapeutics and Cube Entertainment 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 Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptaBio Therapeutics and Cube Entertainment.
Diversification Opportunities for AptaBio Therapeutics and Cube Entertainment
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AptaBio and Cube is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding AptaBio Therapeutics and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment 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 Cube Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cube Entertainment has no effect on the direction of AptaBio Therapeutics i.e., AptaBio Therapeutics and Cube Entertainment go up and down completely randomly.
Pair Corralation between AptaBio Therapeutics and Cube Entertainment
Assuming the 90 days trading horizon AptaBio Therapeutics is expected to under-perform the Cube Entertainment. In addition to that, AptaBio Therapeutics is 1.07 times more volatile than Cube Entertainment. It trades about -0.28 of its total potential returns per unit of risk. Cube Entertainment is currently generating about 0.19 per unit of volatility. If you would invest 1,360,000 in Cube Entertainment on August 27, 2024 and sell it today you would earn a total of 149,000 from holding Cube Entertainment or generate 10.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AptaBio Therapeutics vs. Cube Entertainment
Performance |
| Timeline |
| AptaBio Therapeutics |
| Cube Entertainment |
AptaBio Therapeutics and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AptaBio Therapeutics and Cube Entertainment
The main advantage of trading using opposite AptaBio Therapeutics and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptaBio Therapeutics position performs unexpectedly, Cube Entertainment 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 Cube Entertainment will offset losses from the drop in Cube Entertainment's long position.The idea behind AptaBio Therapeutics and Cube Entertainment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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