Correlation Between Aplisens and New Tech
Can any of the company-specific risk be diversified away by investing in both Aplisens and New Tech 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 Aplisens and New Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aplisens SA and New Tech Venture, you can compare the effects of market volatilities on Aplisens and New Tech 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 Aplisens with a short position of New Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aplisens and New Tech.
Diversification Opportunities for Aplisens and New Tech
Modest diversification
The 3 months correlation between Aplisens and New is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Aplisens SA and New Tech Venture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Tech Venture and Aplisens 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 Aplisens SA are associated (or correlated) with New Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Tech Venture has no effect on the direction of Aplisens i.e., Aplisens and New Tech go up and down completely randomly.
Pair Corralation between Aplisens and New Tech
Assuming the 90 days trading horizon Aplisens SA is expected to generate 0.57 times more return on investment than New Tech. However, Aplisens SA is 1.75 times less risky than New Tech. It trades about -0.01 of its potential returns per unit of risk. New Tech Venture is currently generating about -0.2 per unit of risk. If you would invest 1,920 in Aplisens SA on September 13, 2024 and sell it today you would lose (30.00) from holding Aplisens SA or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 52.38% |
| Values | Daily Returns |
Aplisens SA vs. New Tech Venture
Performance |
| Timeline |
| Aplisens SA |
| New Tech Venture |
Aplisens and New Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aplisens and New Tech
The main advantage of trading using opposite Aplisens and New Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aplisens position performs unexpectedly, New Tech 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 New Tech will offset losses from the drop in New Tech's long position.| Aplisens vs. New Tech Venture | Aplisens vs. Globe Trade Centre | Aplisens vs. Monnari Trade SA | Aplisens vs. Echo Investment SA |
| New Tech vs. Kool2play SA | New Tech vs. Alior Bank SA | New Tech vs. Santander Bank Polska | New Tech vs. Quantum Software SA |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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