Correlation Between Youl Chon and AptaBio Therapeutics

Can any of the company-specific risk be diversified away by investing in both Youl Chon 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 Youl Chon and AptaBio Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Youl Chon Chemical and AptaBio Therapeutics, you can compare the effects of market volatilities on Youl Chon 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 Youl Chon with a short position of AptaBio Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youl Chon and AptaBio Therapeutics.

Diversification Opportunities for Youl Chon and AptaBio Therapeutics

-0.1

Correlation Coefficient

Youl Chon  AptaBio Therapeutics

Good diversification

The 3 months correlation between Youl and AptaBio is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Youl Chon Chemical and AptaBio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptaBio Therapeutics and Youl Chon 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 Youl Chon Chemical 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 Youl Chon i.e., Youl Chon and AptaBio Therapeutics go up and down completely randomly.

Pair Corralation between Youl Chon and AptaBio Therapeutics

Assuming the 90 days trading horizon Youl Chon Chemical is expected to generate 0.92 times more return on investment than AptaBio Therapeutics. However, Youl Chon Chemical is 1.09 times less risky than AptaBio Therapeutics. It trades about 0.01 of its potential returns per unit of risk. AptaBio Therapeutics is currently generating about -0.16 per unit of risk. If you would invest  2,260,000  in Youl Chon Chemical on September 4, 2024 and sell it today you would lose (25,000) from holding Youl Chon Chemical or give up 1.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Youl Chon Chemical  vs.  AptaBio Therapeutics

Youl Chon Chemical

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Youl Chon Chemical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Youl Chon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AptaBio Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AptaBio Therapeutics 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Youl Chon and AptaBio Therapeutics

The main advantage of trading using opposite Youl Chon and AptaBio Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youl Chon 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.

The idea behind Youl Chon Chemical and AptaBio Therapeutics 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.