Correlation Between AptarGroup and Applied Industrial
Can any of the company-specific risk be diversified away by investing in both AptarGroup and Applied Industrial 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 AptarGroup and Applied Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AptarGroup and Applied Industrial Technologies, you can compare the effects of market volatilities on AptarGroup and Applied Industrial 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 AptarGroup with a short position of Applied Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptarGroup and Applied Industrial.
Diversification Opportunities for AptarGroup and Applied Industrial
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AptarGroup and Applied is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding AptarGroup and Applied Industrial Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Industrial and AptarGroup 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 AptarGroup are associated (or correlated) with Applied Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Industrial has no effect on the direction of AptarGroup i.e., AptarGroup and Applied Industrial go up and down completely randomly.
Pair Corralation between AptarGroup and Applied Industrial
Considering the 90-day investment horizon AptarGroup is expected to generate 1.66 times less return on investment than Applied Industrial. But when comparing it to its historical volatility, AptarGroup is 1.57 times less risky than Applied Industrial. It trades about 0.08 of its potential returns per unit of risk. Applied Industrial Technologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 14,122 in Applied Industrial Technologies on November 2, 2024 and sell it today you would earn a total of 11,881 from holding Applied Industrial Technologies or generate 84.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AptarGroup vs. Applied Industrial Technologie
Performance |
| Timeline |
| AptarGroup |
| Applied Industrial |
AptarGroup and Applied Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AptarGroup and Applied Industrial
The main advantage of trading using opposite AptarGroup and Applied Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptarGroup position performs unexpectedly, Applied Industrial 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 Applied Industrial will offset losses from the drop in Applied Industrial's long position.| AptarGroup vs. Haemonetics | AptarGroup vs. Merit Medical Systems | AptarGroup vs. AngioDynamics | AptarGroup vs. Envista Holdings Corp |
| Applied Industrial vs. Core Main | Applied Industrial vs. WW Grainger | Applied Industrial vs. DXP Enterprises | Applied Industrial vs. SiteOne Landscape Supply |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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