Correlation Between AAP and BioAffinity Technologies
Can any of the company-specific risk be diversified away by investing in both AAP and BioAffinity Technologies 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 AAP and BioAffinity Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAP Inc and bioAffinity Technologies Warrant, you can compare the effects of market volatilities on AAP and BioAffinity Technologies 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 AAP with a short position of BioAffinity Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAP and BioAffinity Technologies.
Diversification Opportunities for AAP and BioAffinity Technologies
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between AAP and BioAffinity is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding AAP Inc and bioAffinity Technologies Warra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioAffinity Technologies and AAP 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 AAP Inc are associated (or correlated) with BioAffinity Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioAffinity Technologies has no effect on the direction of AAP i.e., AAP and BioAffinity Technologies go up and down completely randomly.
Pair Corralation between AAP and BioAffinity Technologies
Given the investment horizon of 90 days AAP Inc is expected to generate 1.31 times more return on investment than BioAffinity Technologies. However, AAP is 1.31 times more volatile than bioAffinity Technologies Warrant. It trades about 0.03 of its potential returns per unit of risk. bioAffinity Technologies Warrant is currently generating about -0.03 per unit of risk. If you would invest 0.03 in AAP Inc on August 25, 2024 and sell it today you would lose (0.01) from holding AAP Inc or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAP Inc vs. bioAffinity Technologies Warra
Performance |
| Timeline |
| AAP Inc |
| BioAffinity Technologies |
AAP and BioAffinity Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAP and BioAffinity Technologies
The main advantage of trading using opposite AAP and BioAffinity Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAP position performs unexpectedly, BioAffinity Technologies 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 BioAffinity Technologies will offset losses from the drop in BioAffinity Technologies' long position.The idea behind AAP Inc and bioAffinity Technologies Warrant 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.| BioAffinity Technologies vs. bioAffinity Technologies, | BioAffinity Technologies vs. AAP Inc | BioAffinity Technologies vs. Discount Print USA | BioAffinity Technologies vs. China Dongsheng International |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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