Correlation Between Aptose Biosciences and Microbix Biosystems
Can any of the company-specific risk be diversified away by investing in both Aptose Biosciences and Microbix Biosystems 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 Aptose Biosciences and Microbix Biosystems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptose Biosciences and Microbix Biosystems, you can compare the effects of market volatilities on Aptose Biosciences and Microbix Biosystems 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 Aptose Biosciences with a short position of Microbix Biosystems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptose Biosciences and Microbix Biosystems.
Diversification Opportunities for Aptose Biosciences and Microbix Biosystems
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aptose and Microbix is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aptose Biosciences and Microbix Biosystems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbix Biosystems and Aptose Biosciences 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 Aptose Biosciences are associated (or correlated) with Microbix Biosystems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microbix Biosystems has no effect on the direction of Aptose Biosciences i.e., Aptose Biosciences and Microbix Biosystems go up and down completely randomly.
Pair Corralation between Aptose Biosciences and Microbix Biosystems
Assuming the 90 days trading horizon Aptose Biosciences is expected to under-perform the Microbix Biosystems. In addition to that, Aptose Biosciences is 2.81 times more volatile than Microbix Biosystems. It trades about -0.19 of its total potential returns per unit of risk. Microbix Biosystems is currently generating about -0.16 per unit of volatility. If you would invest 38.00 in Microbix Biosystems on August 29, 2024 and sell it today you would lose (7.00) from holding Microbix Biosystems or give up 18.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Aptose Biosciences vs. Microbix Biosystems
Performance |
| Timeline |
| Aptose Biosciences |
| Microbix Biosystems |
Aptose Biosciences and Microbix Biosystems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptose Biosciences and Microbix Biosystems
The main advantage of trading using opposite Aptose Biosciences and Microbix Biosystems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptose Biosciences position performs unexpectedly, Microbix Biosystems 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 Microbix Biosystems will offset losses from the drop in Microbix Biosystems' long position.The idea behind Aptose Biosciences and Microbix Biosystems 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.| Microbix Biosystems vs. Solar Alliance Energy | Microbix Biosystems vs. Braille Energy Systems | Microbix Biosystems vs. MedMira | Microbix Biosystems vs. Lite Access Technologies |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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