Correlation Between Aptitude Software and Edinburgh Investment

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

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

Diversification Opportunities for Aptitude Software and Edinburgh Investment

0.68

Correlation Coefficient

Aptitude Software  Edinburgh Investment

Poor diversification

The 3 months correlation between Aptitude and Edinburgh is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aptitude Software Group and Edinburgh Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edinburgh Investment and Aptitude Software 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 Aptitude Software Group are associated (or correlated) with Edinburgh Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edinburgh Investment has no effect on the direction of Aptitude Software i.e., Aptitude Software and Edinburgh Investment go up and down completely randomly.

Pair Corralation between Aptitude Software and Edinburgh Investment

Assuming the 90 days trading horizon Aptitude Software is expected to generate 1.45 times less return on investment than Edinburgh Investment. In addition to that, Aptitude Software is 5.03 times more volatile than Edinburgh Investment Trust. It trades about 0.04 of its total potential returns per unit of risk. Edinburgh Investment Trust is currently generating about 0.27 per unit of volatility. If you would invest  73,674  in Edinburgh Investment Trust on April 20, 2025 and sell it today you would earn a total of  6,126  from holding Edinburgh Investment Trust or generate 8.32% return on investment over 90 days.

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

Aptitude Software Group  vs.  Edinburgh Investment Trust

Aptitude Software

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aptitude Software Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Aptitude Software is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Edinburgh Investment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Edinburgh Investment Trust are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Edinburgh Investment may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Aptitude Software and Edinburgh Investment

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

The idea behind Aptitude Software Group and Edinburgh Investment Trust 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.