Correlation Between AppHarvest and AquaBounty Technologies

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

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

Diversification Opportunities for AppHarvest and AquaBounty Technologies

0.49

Correlation Coefficient

AppHarvest  AquaBounty Technologies

Very weak diversification

The 3 months correlation between AppHarvest and AquaBounty is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding AppHarvest and AquaBounty Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AquaBounty Technologies and AppHarvest 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 AppHarvest are associated (or correlated) with AquaBounty Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AquaBounty Technologies has no effect on the direction of AppHarvest i.e., AppHarvest and AquaBounty Technologies go up and down completely randomly.

Pair Corralation between AppHarvest and AquaBounty Technologies

If you would invest  0.90  in AppHarvest on September 17, 2024 and sell it today you would earn a total of  0.00  from holding AppHarvest or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.54%
Values	Daily Returns

AppHarvest  vs.  AquaBounty Technologies

AppHarvest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AppHarvest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical indicators, AppHarvest is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

AquaBounty Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AquaBounty Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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 AppHarvest and AquaBounty Technologies

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

The idea behind AppHarvest and AquaBounty Technologies 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.