Correlation Between Applied Industrial and AptarGroup
Can any of the company-specific risk be diversified away by investing in both Applied Industrial and AptarGroup 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 Applied Industrial and AptarGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Industrial Technologies and AptarGroup, you can compare the effects of market volatilities on Applied Industrial and AptarGroup 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 Applied Industrial with a short position of AptarGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Industrial and AptarGroup.
Diversification Opportunities for Applied Industrial and AptarGroup
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Applied and AptarGroup is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Applied Industrial Technologie and AptarGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptarGroup and Applied Industrial 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 Applied Industrial Technologies are associated (or correlated) with AptarGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AptarGroup has no effect on the direction of Applied Industrial i.e., Applied Industrial and AptarGroup go up and down completely randomly.
Pair Corralation between Applied Industrial and AptarGroup
Considering the 90-day investment horizon Applied Industrial Technologies is expected to generate 1.63 times more return on investment than AptarGroup. However, Applied Industrial is 1.63 times more volatile than AptarGroup. It trades about 0.13 of its potential returns per unit of risk. AptarGroup is currently generating about 0.1 per unit of risk. If you would invest 12,597 in Applied Industrial Technologies on August 26, 2024 and sell it today you would earn a total of 15,114 from holding Applied Industrial Technologies or generate 119.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Industrial Technologie vs. AptarGroup
Performance |
| Timeline |
| Applied Industrial |
| AptarGroup |
Applied Industrial and AptarGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Industrial and AptarGroup
The main advantage of trading using opposite Applied Industrial and AptarGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Industrial position performs unexpectedly, AptarGroup 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 AptarGroup will offset losses from the drop in AptarGroup's long position.| Applied Industrial vs. Core Main | Applied Industrial vs. WW Grainger | Applied Industrial vs. DXP Enterprises | Applied Industrial vs. SiteOne Landscape Supply |
| AptarGroup vs. Haemonetics | AptarGroup vs. Merit Medical Systems | AptarGroup vs. AngioDynamics | AptarGroup vs. Envista Holdings Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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