Correlation Between Hemostemix and Aptose Biosciences

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

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

Diversification Opportunities for Hemostemix and Aptose Biosciences

0.47

Correlation Coefficient

Hemostemix  Aptose Biosciences

Very weak diversification

The 3 months correlation between Hemostemix and Aptose is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hemostemix and Aptose Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptose Biosciences and Hemostemix 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 Hemostemix are associated (or correlated) with Aptose Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptose Biosciences has no effect on the direction of Hemostemix i.e., Hemostemix and Aptose Biosciences go up and down completely randomly.

Pair Corralation between Hemostemix and Aptose Biosciences

Assuming the 90 days horizon Hemostemix is expected to generate 26.68 times less return on investment than Aptose Biosciences. But when comparing it to its historical volatility, Hemostemix is 1.82 times less risky than Aptose Biosciences. It trades about 0.01 of its potential returns per unit of risk. Aptose Biosciences is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  26.00  in Aptose Biosciences on September 24, 2024 and sell it today you would earn a total of  16.00  from holding Aptose Biosciences or generate 61.54% return on investment over 90 days.

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

Hemostemix  vs.  Aptose Biosciences

Hemostemix

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hemostemix are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Hemostemix showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Hemostemix and Aptose Biosciences

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

The idea behind Hemostemix and Aptose Biosciences 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..