Correlation Between SafePal and Aptos

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

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

Diversification Opportunities for SafePal and Aptos

-0.53

Correlation Coefficient

SafePal  Aptos

Excellent diversification

The 3 months correlation between SafePal and Aptos is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding SafePal and Aptos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptos and SafePal 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 SafePal 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 SafePal i.e., SafePal and Aptos go up and down completely randomly.

Pair Corralation between SafePal and Aptos

Assuming the 90 days trading horizon SafePal is expected to generate 23.27 times less return on investment than Aptos. But when comparing it to its historical volatility, SafePal is 1.73 times less risky than Aptos. It trades about 0.02 of its potential returns per unit of risk. Aptos is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  613.00  in Aptos on September 1, 2024 and sell it today you would earn a total of  726.00  from holding Aptos or generate 118.43% return on investment over 90 days.

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

SafePal  vs.  Aptos

SafePal

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SafePal are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SafePal 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

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aptos are ranked lower than 18 (%) 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 SafePal and Aptos

The main advantage of trading using opposite SafePal and Aptos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SafePal 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 SafePal 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.

Check out your portfolio center.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.