Correlation Between Viatron Technologies and AptaBio Therapeutics

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

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

Diversification Opportunities for Viatron Technologies and AptaBio Therapeutics

-0.14

Correlation Coefficient

Viatron Technologies  AptaBio Therapeutics

Good diversification

The 3 months correlation between Viatron and AptaBio is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Viatron Technologies and AptaBio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptaBio Therapeutics and Viatron 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 Viatron Technologies are associated (or correlated) with AptaBio Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AptaBio Therapeutics has no effect on the direction of Viatron Technologies i.e., Viatron Technologies and AptaBio Therapeutics go up and down completely randomly.

Pair Corralation between Viatron Technologies and AptaBio Therapeutics

Assuming the 90 days trading horizon Viatron Technologies is expected to generate 0.52 times more return on investment than AptaBio Therapeutics. However, Viatron Technologies is 1.93 times less risky than AptaBio Therapeutics. It trades about 0.25 of its potential returns per unit of risk. AptaBio Therapeutics is currently generating about -0.03 per unit of risk. If you would invest  837,000  in Viatron Technologies on February 4, 2024 and sell it today you would earn a total of  69,000  from holding Viatron Technologies or generate 8.24% return on investment over 90 days.

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

Viatron Technologies  vs.  AptaBio Therapeutics

Viatron Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Viatron Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Viatron Technologies may actually be approaching a critical reversion point that can send shares even higher in June 2024.

AptaBio Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AptaBio Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AptaBio Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Viatron Technologies and AptaBio Therapeutics

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

The idea behind Viatron Technologies and AptaBio Therapeutics 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.