Correlation Between Aptos and Sonic Labs
Can any of the company-specific risk be diversified away by investing in both Aptos and Sonic Labs 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 Sonic Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptos and Sonic Labs, you can compare the effects of market volatilities on Aptos and Sonic Labs 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 Sonic Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptos and Sonic Labs.
Diversification Opportunities for Aptos and Sonic Labs
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aptos and Sonic is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aptos and Sonic Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Labs 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 Sonic Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonic Labs has no effect on the direction of Aptos i.e., Aptos and Sonic Labs go up and down completely randomly.
Pair Corralation between Aptos and Sonic Labs
Assuming the 90 days trading horizon Aptos is expected to under-perform the Sonic Labs. But the crypto coin apears to be less risky and, when comparing its historical volatility, Aptos is 25.6 times less risky than Sonic Labs. The crypto coin trades about -0.08 of its potential returns per unit of risk. The Sonic Labs is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Sonic Labs on October 22, 2024 and sell it today you would earn a total of 68.00 from holding Sonic Labs or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Aptos vs. Sonic Labs
Performance |
| Timeline |
| Aptos |
| Sonic Labs |
Aptos and Sonic Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptos and Sonic Labs
The main advantage of trading using opposite Aptos and Sonic Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptos position performs unexpectedly, Sonic Labs 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 Sonic Labs will offset losses from the drop in Sonic Labs' long position.The idea behind Aptos and Sonic Labs 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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