Correlation Between Aptose Biosciences and Hemostemix

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

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

Diversification Opportunities for Aptose Biosciences and Hemostemix

0.45

Correlation Coefficient

Aptose Biosciences  Hemostemix

Very weak diversification

The 3 months correlation between Aptose and Hemostemix is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Aptose Biosciences and Hemostemix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemostemix and Aptose Biosciences 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 Aptose Biosciences are associated (or correlated) with Hemostemix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemostemix has no effect on the direction of Aptose Biosciences i.e., Aptose Biosciences and Hemostemix go up and down completely randomly.

Pair Corralation between Aptose Biosciences and Hemostemix

Assuming the 90 days trading horizon Aptose Biosciences is expected to generate 5.41 times more return on investment than Hemostemix. However, Aptose Biosciences is 5.41 times more volatile than Hemostemix. It trades about 0.03 of its potential returns per unit of risk. Hemostemix is currently generating about 0.02 per unit of risk. If you would invest  1,230  in Aptose Biosciences on September 25, 2024 and sell it today you would lose (1,194) from holding Aptose Biosciences or give up 97.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.99%
Values	Daily Returns

Aptose Biosciences  vs.  Hemostemix

Aptose Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aptose Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Hemostemix

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hemostemix are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Hemostemix showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aptose Biosciences and Hemostemix

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

The idea behind Aptose Biosciences and Hemostemix 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.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.