Correlation Between AquaBounty Technologies and AppHarvest

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

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

Diversification Opportunities for AquaBounty Technologies and AppHarvest

0.49

Correlation Coefficient

AquaBounty Technologies  AppHarvest

Very weak diversification

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

Pair Corralation between AquaBounty Technologies and AppHarvest

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

AquaBounty Technologies  vs.  AppHarvest

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.

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.

Pair Trading with AquaBounty Technologies and AppHarvest

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

The idea behind AquaBounty Technologies and AppHarvest 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.