Correlation Between DAT and Aptos

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

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

Diversification Opportunities for DAT and Aptos

0.37

Correlation Coefficient

DAT  Aptos

Weak diversification

The 3 months correlation between DAT and Aptos is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding DAT and Aptos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptos and DAT 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 DAT are associated (or correlated) with Aptos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptos has no effect on the direction of DAT i.e., DAT and Aptos go up and down completely randomly.

Pair Corralation between DAT and Aptos

If you would invest  577.00  in Aptos on September 4, 2024 and sell it today you would earn a total of  811.00  from holding Aptos or generate 140.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

DAT  vs.  Aptos

DAT

Risk-Adjusted Performance

0 of 100

Very Weak

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

Aptos

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aptos are ranked lower than 20 (%) 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.

Pair Trading with DAT and Aptos

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

The idea behind DAT and Aptos 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.