Correlation Between AptaBio Therapeutics and Innometry
Can any of the company-specific risk be diversified away by investing in both AptaBio Therapeutics and Innometry 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 Innometry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AptaBio Therapeutics and Innometry Co, you can compare the effects of market volatilities on AptaBio Therapeutics and Innometry 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 Innometry. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptaBio Therapeutics and Innometry.
Diversification Opportunities for AptaBio Therapeutics and Innometry
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AptaBio and Innometry is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding AptaBio Therapeutics and Innometry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innometry 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 Innometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innometry has no effect on the direction of AptaBio Therapeutics i.e., AptaBio Therapeutics and Innometry go up and down completely randomly.
Pair Corralation between AptaBio Therapeutics and Innometry
Assuming the 90 days trading horizon AptaBio Therapeutics is expected to generate 1.46 times more return on investment than Innometry. However, AptaBio Therapeutics is 1.46 times more volatile than Innometry Co. It trades about -0.01 of its potential returns per unit of risk. Innometry Co is currently generating about -0.03 per unit of risk. If you would invest 1,315,000 in AptaBio Therapeutics on August 28, 2024 and sell it today you would lose (656,000) from holding AptaBio Therapeutics or give up 49.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AptaBio Therapeutics vs. Innometry Co
Performance |
| Timeline |
| AptaBio Therapeutics |
| Innometry |
AptaBio Therapeutics and Innometry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AptaBio Therapeutics and Innometry
The main advantage of trading using opposite AptaBio Therapeutics and Innometry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptaBio Therapeutics position performs unexpectedly, Innometry 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 Innometry will offset losses from the drop in Innometry's long position.The idea behind AptaBio Therapeutics and Innometry Co 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.| Innometry vs. Daejoo Electronic Materials | Innometry vs. Parksystems Corp | Innometry vs. BH Co | Innometry vs. Partron 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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