Correlation Between Horizon Therapeutics and APPTECH CORP

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

Diversification Opportunities for Horizon Therapeutics and APPTECH CORP

-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between Horizon and APPTECH is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Therapeutics and APPTECH CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPTECH CORP and Horizon Therapeutics 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 Horizon Therapeutics 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 Horizon Therapeutics i.e., Horizon Therapeutics and APPTECH CORP go up and down completely randomly.

Pair Corralation between Horizon Therapeutics and APPTECH CORP

Given the investment horizon of 90 days Horizon Therapeutics is expected to under-perform the APPTECH CORP. But the stock apears to be less risky and, when comparing its historical volatility, Horizon Therapeutics is 4.85 times less risky than APPTECH CORP. The stock trades about 0.0 of its potential returns per unit of risk. The APPTECH CORP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  120.00  in APPTECH CORP on July 6, 2022 and sell it today you would lose (47.00)  from holding APPTECH CORP or give up 39.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Horizon Therapeutics  vs.  APPTECH CORP

 Performance (%) 
       Timeline  
Horizon Therapeutics 
Horizon Performance
0 of 100
Over the last 90 days Horizon Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in November 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Horizon Price Channel

APPTECH CORP 
APPTECH Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in APPTECH CORP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, APPTECH CORP showed solid returns over the last few months and may actually be approaching a breakup point.

APPTECH Price Channel

Horizon Therapeutics and APPTECH CORP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Horizon Therapeutics and APPTECH CORP

The main advantage of trading using opposite Horizon Therapeutics and APPTECH CORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Therapeutics 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.
Horizon Therapeutics vs. Amazon Inc
The idea behind Horizon Therapeutics 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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