Correlation Between Apogee Therapeutics, and Fevertree Drinks

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

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

Diversification Opportunities for Apogee Therapeutics, and Fevertree Drinks

0.78

Correlation Coefficient

Apogee Therapeutics,  Fevertree Drinks

Poor diversification

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

Pair Corralation between Apogee Therapeutics, and Fevertree Drinks

Given the investment horizon of 90 days Apogee Therapeutics, Common is expected to generate 2.53 times more return on investment than Fevertree Drinks. However, Apogee Therapeutics, is 2.53 times more volatile than Fevertree Drinks Plc. It trades about -0.07 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about -0.22 per unit of risk. If you would invest  5,992  in Apogee Therapeutics, Common on September 24, 2024 and sell it today you would lose (1,265) from holding Apogee Therapeutics, Common or give up 21.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.38%
Values	Daily Returns

Apogee Therapeutics, Common  vs.  Fevertree Drinks Plc

Apogee Therapeutics,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apogee Therapeutics, Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Fevertree Drinks Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fevertree Drinks Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Apogee Therapeutics, and Fevertree Drinks

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

The idea behind Apogee Therapeutics, Common and Fevertree Drinks Plc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..