Correlation Between AptaBio Therapeutics and NEXTIN
Can any of the company-specific risk be diversified away by investing in both AptaBio Therapeutics and NEXTIN 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 NEXTIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AptaBio Therapeutics and NEXTIN Inc, you can compare the effects of market volatilities on AptaBio Therapeutics and NEXTIN 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 NEXTIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptaBio Therapeutics and NEXTIN.
Diversification Opportunities for AptaBio Therapeutics and NEXTIN
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AptaBio and NEXTIN is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding AptaBio Therapeutics and NEXTIN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXTIN 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 NEXTIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXTIN Inc has no effect on the direction of AptaBio Therapeutics i.e., AptaBio Therapeutics and NEXTIN go up and down completely randomly.
Pair Corralation between AptaBio Therapeutics and NEXTIN
Assuming the 90 days trading horizon AptaBio Therapeutics is expected to generate 1.8 times more return on investment than NEXTIN. However, AptaBio Therapeutics is 1.8 times more volatile than NEXTIN Inc. It trades about 0.0 of its potential returns per unit of risk. NEXTIN Inc is currently generating about -0.01 per unit of risk. If you would invest 805,000 in AptaBio Therapeutics on August 25, 2024 and sell it today you would lose (177,000) from holding AptaBio Therapeutics or give up 21.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
AptaBio Therapeutics vs. NEXTIN Inc
Performance |
| Timeline |
| AptaBio Therapeutics |
| NEXTIN Inc |
AptaBio Therapeutics and NEXTIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AptaBio Therapeutics and NEXTIN
The main advantage of trading using opposite AptaBio Therapeutics and NEXTIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptaBio Therapeutics position performs unexpectedly, NEXTIN 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 NEXTIN will offset losses from the drop in NEXTIN'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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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