Correlation Between Aptos and WIN

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

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

Diversification Opportunities for Aptos and WIN

-0.32

Correlation Coefficient

Aptos  WIN

Very good diversification

The 3 months correlation between Aptos and WIN is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aptos and WIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIN 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 WIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIN has no effect on the direction of Aptos i.e., Aptos and WIN go up and down completely randomly.

Pair Corralation between Aptos and WIN

Assuming the 90 days trading horizon Aptos is expected to generate 1.09 times less return on investment than WIN. In addition to that, Aptos is 1.17 times more volatile than WIN. It trades about 0.22 of its total potential returns per unit of risk. WIN is currently generating about 0.28 per unit of volatility. If you would invest  0.01  in WIN on August 30, 2024 and sell it today you would earn a total of  0.00  from holding WIN or generate 34.72% return on investment over 90 days.

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

Aptos  vs.  WIN

Aptos

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aptos are ranked lower than 15 (%) 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.

WIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WIN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, WIN is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Aptos and WIN

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

The idea behind Aptos and WIN 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.