Correlation Between Aptose Biosciences and RepliCel Life

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

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

Diversification Opportunities for Aptose Biosciences and RepliCel Life

0.6

Correlation Coefficient

Aptose Biosciences  RepliCel Life

Poor diversification

The 3 months correlation between Aptose and RepliCel is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aptose Biosciences and RepliCel Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RepliCel Life Sciences 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 RepliCel Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RepliCel Life Sciences has no effect on the direction of Aptose Biosciences i.e., Aptose Biosciences and RepliCel Life go up and down completely randomly.

Pair Corralation between Aptose Biosciences and RepliCel Life

Assuming the 90 days trading horizon Aptose Biosciences is expected to generate 0.49 times more return on investment than RepliCel Life. However, Aptose Biosciences is 2.03 times less risky than RepliCel Life. It trades about -0.01 of its potential returns per unit of risk. RepliCel Life Sciences is currently generating about -0.02 per unit of risk. If you would invest  55.00  in Aptose Biosciences on September 26, 2024 and sell it today you would lose (18.00) from holding Aptose Biosciences or give up 32.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Aptose Biosciences  vs.  RepliCel Life Sciences

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.

RepliCel Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RepliCel Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Aptose Biosciences and RepliCel Life

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

The idea behind Aptose Biosciences and RepliCel Life Sciences 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.