Correlation Between Dow Jones and AptaBio Therapeutics
Can any of the company-specific risk be diversified away by investing in both Dow Jones and AptaBio Therapeutics 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 Dow Jones and AptaBio Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and AptaBio Therapeutics, you can compare the effects of market volatilities on Dow Jones and AptaBio Therapeutics 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 Dow Jones with a short position of AptaBio Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and AptaBio Therapeutics.
Diversification Opportunities for Dow Jones and AptaBio Therapeutics
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and AptaBio is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and AptaBio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptaBio Therapeutics and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with AptaBio Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AptaBio Therapeutics has no effect on the direction of Dow Jones i.e., Dow Jones and AptaBio Therapeutics go up and down completely randomly.
Pair Corralation between Dow Jones and AptaBio Therapeutics
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.2 times more return on investment than AptaBio Therapeutics. However, Dow Jones Industrial is 5.02 times less risky than AptaBio Therapeutics. It trades about 0.04 of its potential returns per unit of risk. AptaBio Therapeutics is currently generating about 0.01 per unit of risk. If you would invest 3,405,170 in Dow Jones Industrial on January 19, 2025 and sell it today you would earn a total of 509,053 from holding Dow Jones Industrial or generate 14.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.57% |
| Values | Daily Returns |
Dow Jones Industrial vs. AptaBio Therapeutics
Performance |
| Timeline |
Dow Jones and AptaBio Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
AptaBio Therapeutics
Pair trading matchups for AptaBio Therapeutics
Pair Trading with Dow Jones and AptaBio Therapeutics
The main advantage of trading using opposite Dow Jones and AptaBio Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, AptaBio Therapeutics 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 AptaBio Therapeutics will offset losses from the drop in AptaBio Therapeutics' long position.| Dow Jones vs. Emerson Electric | Dow Jones vs. Ambipar Emergency Response | Dow Jones vs. ChampionX | Dow Jones vs. Primoris Services |
| AptaBio Therapeutics vs. ABL Bio | AptaBio Therapeutics vs. Helixmith Co | AptaBio Therapeutics vs. OliX PharmaceuticalsInc | AptaBio Therapeutics vs. Oscotec |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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