Correlation Between Aptos and Polygon

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

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

Diversification Opportunities for Aptos and Polygon

0.86

Correlation Coefficient

Aptos  Polygon

Very poor diversification

The 3 months correlation between Aptos and Polygon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aptos and Polygon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polygon and Aptos 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 Aptos are associated (or correlated) with Polygon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polygon has no effect on the direction of Aptos i.e., Aptos and Polygon go up and down completely randomly.

Pair Corralation between Aptos and Polygon

Assuming the 90 days trading horizon Aptos is expected to under-perform the Polygon. In addition to that, Aptos is 1.15 times more volatile than Polygon. It trades about -0.02 of its total potential returns per unit of risk. Polygon is currently generating about -0.01 per unit of volatility. If you would invest  25.00  in Polygon on April 24, 2025 and sell it today you would lose (2.00) from holding Polygon or give up 8.0% of portfolio value over 90 days.

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

Aptos  vs.  Polygon

Aptos

Risk-Adjusted Performance

Weak

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

Polygon

Risk-Adjusted Performance

Weak

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

Pair Trading with Aptos and Polygon

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

The idea behind Aptos and Polygon 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 Correlations module to find global opportunities by holding instruments from different markets.