Correlation Between Aptose Biosciences and Avidity Biosciences

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Can any of the company-specific risk be diversified away by investing in both Aptose Biosciences and Avidity Biosciences 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 Avidity Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptose Biosciences and Avidity Biosciences, you can compare the effects of market volatilities on Aptose Biosciences and Avidity Biosciences 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 Avidity Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptose Biosciences and Avidity Biosciences.

Diversification Opportunities for Aptose Biosciences and Avidity Biosciences

AptoseAvidityDiversified AwayAptoseAvidityDiversified Away100%
0.47
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Aptose and Avidity is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Aptose Biosciences and Avidity Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avidity Biosciences 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 Avidity Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avidity Biosciences has no effect on the direction of Aptose Biosciences i.e., Aptose Biosciences and Avidity Biosciences go up and down completely randomly.

Pair Corralation between Aptose Biosciences and Avidity Biosciences

Given the investment horizon of 90 days Aptose Biosciences is expected to under-perform the Avidity Biosciences. In addition to that, Aptose Biosciences is 3.46 times more volatile than Avidity Biosciences. It trades about -0.13 of its total potential returns per unit of risk. Avidity Biosciences is currently generating about 0.11 per unit of volatility. If you would invest  3,008  in Avidity Biosciences on November 23, 2024 and sell it today you would earn a total of  186.00  from holding Avidity Biosciences or generate 6.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

Aptose Biosciences  vs.  Avidity Biosciences

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50-40-30-20-10
JavaScript chart by amCharts 3.21.15APTO RNA
       Timeline  
Aptose Biosciences 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Aptose Biosciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Aptose Biosciences displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.150.20.250.30.35
Avidity Biosciences 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Avidity Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb30354045

Aptose Biosciences and Avidity Biosciences Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-18.24-13.66-9.08-4.5-0.07024.078.2812.516.7120.92 0.0050.0100.0150.0200.0250.030
JavaScript chart by amCharts 3.21.15APTO RNA
       Returns  

Pair Trading with Aptose Biosciences and Avidity Biosciences

The main advantage of trading using opposite Aptose Biosciences and Avidity Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptose Biosciences position performs unexpectedly, Avidity Biosciences 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 Avidity Biosciences will offset losses from the drop in Avidity Biosciences' long position.
The idea behind Aptose Biosciences and Avidity Biosciences 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.
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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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