Correlation Between Aptos and MORE
Can any of the company-specific risk be diversified away by investing in both Aptos and MORE 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 Aptos and MORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptos and MORE, you can compare the effects of market volatilities on Aptos and MORE 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 Aptos with a short position of MORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptos and MORE.
Diversification Opportunities for Aptos and MORE
Very good diversification
The 3 months correlation between Aptos and MORE is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aptos and MORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MORE and Aptos 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 Aptos are associated (or correlated) with MORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MORE has no effect on the direction of Aptos i.e., Aptos and MORE go up and down completely randomly.
Pair Corralation between Aptos and MORE
Assuming the 90 days trading horizon Aptos is expected to generate 17.45 times less return on investment than MORE. But when comparing it to its historical volatility, Aptos is 15.66 times less risky than MORE. It trades about 0.07 of its potential returns per unit of risk. MORE is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.07 in MORE on August 27, 2024 and sell it today you would earn a total of 0.03 from holding MORE or generate 41.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aptos vs. MORE
Performance |
| Timeline |
| Aptos |
| MORE |
Aptos and MORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptos and MORE
The main advantage of trading using opposite Aptos and MORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptos position performs unexpectedly, MORE 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 MORE will offset losses from the drop in MORE's long position.The idea behind Aptos and MORE 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.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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |