Correlation Between Aptose Biosciences and Edesa Biotech
Can any of the company-specific risk be diversified away by investing in both Aptose Biosciences and Edesa Biotech 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 Edesa Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptose Biosciences and Edesa Biotech, you can compare the effects of market volatilities on Aptose Biosciences and Edesa Biotech 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 Edesa Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptose Biosciences and Edesa Biotech.
Diversification Opportunities for Aptose Biosciences and Edesa Biotech
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aptose and Edesa is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aptose Biosciences and Edesa Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edesa Biotech 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 Edesa Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edesa Biotech has no effect on the direction of Aptose Biosciences i.e., Aptose Biosciences and Edesa Biotech go up and down completely randomly.
Pair Corralation between Aptose Biosciences and Edesa Biotech
Given the investment horizon of 90 days Aptose Biosciences is expected to under-perform the Edesa Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Aptose Biosciences is 1.75 times less risky than Edesa Biotech. The stock trades about -0.4 of its potential returns per unit of risk. The Edesa Biotech is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 191.00 in Edesa Biotech on November 2, 2024 and sell it today you would lose (2.00) from holding Edesa Biotech or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aptose Biosciences vs. Edesa Biotech
Performance |
| Timeline |
| Aptose Biosciences |
| Edesa Biotech |
Aptose Biosciences and Edesa Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptose Biosciences and Edesa Biotech
The main advantage of trading using opposite Aptose Biosciences and Edesa Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptose Biosciences position performs unexpectedly, Edesa Biotech 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 Edesa Biotech will offset losses from the drop in Edesa Biotech's long position.| Aptose Biosciences vs. Surrozen | Aptose Biosciences vs. Armata Pharmaceuticals | Aptose Biosciences vs. Pasithea Therapeutics Corp | Aptose Biosciences vs. Aditxt Inc |
| Edesa Biotech vs. SAB Biotherapeutics | Edesa Biotech vs. Senti Biosciences | Edesa Biotech vs. Cingulate | Edesa Biotech vs. Indaptus Therapeutics |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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