Correlation Between AptaBio Therapeutics and Sugentech

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

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

Diversification Opportunities for AptaBio Therapeutics and Sugentech

0.78

Correlation Coefficient

AptaBio Therapeutics  Sugentech

Poor diversification

The 3 months correlation between AptaBio and Sugentech is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding AptaBio Therapeutics and Sugentech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sugentech and AptaBio Therapeutics 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 AptaBio Therapeutics are associated (or correlated) with Sugentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sugentech has no effect on the direction of AptaBio Therapeutics i.e., AptaBio Therapeutics and Sugentech go up and down completely randomly.

Pair Corralation between AptaBio Therapeutics and Sugentech

Assuming the 90 days trading horizon AptaBio Therapeutics is expected to under-perform the Sugentech. In addition to that, AptaBio Therapeutics is 1.03 times more volatile than Sugentech. It trades about -0.05 of its total potential returns per unit of risk. Sugentech is currently generating about 0.03 per unit of volatility. If you would invest  502,000  in Sugentech on September 26, 2024 and sell it today you would earn a total of  15,000  from holding Sugentech or generate 2.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.18%
Values	Daily Returns

AptaBio Therapeutics  vs.  Sugentech

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.

Sugentech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sugentech 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 AptaBio Therapeutics and Sugentech

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

The idea behind AptaBio Therapeutics and Sugentech 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.