Correlation Between Aptos and Clearpool

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

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

Diversification Opportunities for Aptos and Clearpool

0.73

Correlation Coefficient

Aptos  Clearpool

Poor diversification

The 3 months correlation between Aptos and Clearpool is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aptos and Clearpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearpool and Aptos 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 Aptos are associated (or correlated) with Clearpool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearpool has no effect on the direction of Aptos i.e., Aptos and Clearpool go up and down completely randomly.

Pair Corralation between Aptos and Clearpool

Assuming the 90 days trading horizon Aptos is expected to generate 10.72 times less return on investment than Clearpool. But when comparing it to its historical volatility, Aptos is 20.76 times less risky than Clearpool. It trades about 0.24 of its potential returns per unit of risk. Clearpool is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Clearpool on September 3, 2024 and sell it today you would earn a total of  14.00  from holding Clearpool or generate 116.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Aptos  vs.  Clearpool

Aptos

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aptos are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Aptos exhibited solid returns over the last few months and may actually be approaching a breakup point.

Clearpool

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clearpool are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Clearpool exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aptos and Clearpool

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

The idea behind Aptos and Clearpool 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.