Correlation Between Aeroports and APPTECH CORP

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Can any of the company-specific risk be diversified away by investing in both Aeroports and APPTECH CORP 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 Aeroports and APPTECH CORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeroports DE Paris and APPTECH CORP, you can compare the effects of market volatilities on Aeroports and APPTECH CORP 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 Aeroports with a short position of APPTECH CORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeroports and APPTECH CORP.

Diversification Opportunities for Aeroports and APPTECH CORP

0.05
  Correlation Coefficient

Significant diversification

The 3 months correlation between Aeroports and APPTECH is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aeroports DE Paris and APPTECH CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPTECH CORP and Aeroports 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 Aeroports DE Paris are associated (or correlated) with APPTECH CORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPTECH CORP has no effect on the direction of Aeroports i.e., Aeroports and APPTECH CORP go up and down completely randomly.

Pair Corralation between Aeroports and APPTECH CORP

Assuming the 90 days horizon Aeroports DE Paris is expected to generate 0.31 times more return on investment than APPTECH CORP. However, Aeroports DE Paris is 3.18 times less risky than APPTECH CORP. It trades about 0.03 of its potential returns per unit of risk. APPTECH CORP is currently generating about -0.04 per unit of risk. If you would invest  1,128  in Aeroports DE Paris on August 29, 2022 and sell it today you would earn a total of  114.00  from holding Aeroports DE Paris or generate 10.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Aeroports DE Paris  vs.  APPTECH CORP

 Performance (%) 
       Timeline  
Aeroports DE Paris 
Aeroports Performance
0 of 100
Over the last 90 days Aeroports DE Paris has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Aeroports Price Channel

APPTECH CORP 
APPTECH Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in APPTECH CORP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, APPTECH CORP showed solid returns over the last few months and may actually be approaching a breakup point.

APPTECH Price Channel

Aeroports and APPTECH CORP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aeroports and APPTECH CORP

The main advantage of trading using opposite Aeroports and APPTECH CORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeroports position performs unexpectedly, APPTECH CORP 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 APPTECH CORP will offset losses from the drop in APPTECH CORP's long position.
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The idea behind Aeroports DE Paris and APPTECH CORP 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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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 Bond Directory module to find actively traded corporate debentures issued by US companies.

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