Correlation Between RepliCel Life and Aptose Biosciences

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

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

Diversification Opportunities for RepliCel Life and Aptose Biosciences

0.58

Correlation Coefficient

RepliCel Life  Aptose Biosciences

Very weak diversification

The 3 months correlation between RepliCel and Aptose is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding RepliCel Life Sciences and Aptose Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptose Biosciences and RepliCel Life 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 RepliCel Life Sciences 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 RepliCel Life i.e., RepliCel Life and Aptose Biosciences go up and down completely randomly.

Pair Corralation between RepliCel Life and Aptose Biosciences

Given the investment horizon of 90 days RepliCel Life Sciences is expected to generate 1.82 times more return on investment than Aptose Biosciences. However, RepliCel Life is 1.82 times more volatile than Aptose Biosciences. It trades about -0.01 of its potential returns per unit of risk. Aptose Biosciences is currently generating about -0.1 per unit of risk. If you would invest  6.50  in RepliCel Life Sciences on September 25, 2024 and sell it today you would lose (5.50) from holding RepliCel Life Sciences or give up 84.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

RepliCel Life Sciences  vs.  Aptose Biosciences

RepliCel Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RepliCel Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

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 RepliCel Life and Aptose Biosciences

The main advantage of trading using opposite RepliCel Life and Aptose Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RepliCel Life 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 RepliCel Life Sciences 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.