Correlation Between Aptus Defined and Akros Monthly

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

Diversification Opportunities for Aptus Defined and Akros Monthly

0.82
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Aptus and Akros is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Aptus Defined Risk and Akros Monthly Payout in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akros Monthly Payout and Aptus Defined 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 Aptus Defined Risk are associated (or correlated) with Akros Monthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akros Monthly Payout has no effect on the direction of Aptus Defined i.e., Aptus Defined and Akros Monthly go up and down completely randomly.

Pair Corralation between Aptus Defined and Akros Monthly

Given the investment horizon of 90 days Aptus Defined is expected to generate 4.2 times less return on investment than Akros Monthly. But when comparing it to its historical volatility, Aptus Defined Risk is 1.73 times less risky than Akros Monthly. It trades about 0.11 of its potential returns per unit of risk. Akros Monthly Payout is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  2,303  in Akros Monthly Payout on December 3, 2023 and sell it today you would earn a total of  130.00  from holding Akros Monthly Payout or generate 5.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Aptus Defined Risk  vs.  Akros Monthly Payout

 Performance 
       Timeline  
Aptus Defined Risk 

Risk-Adjusted Performance

17 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Aptus Defined Risk are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Aptus Defined may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Akros Monthly Payout 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Akros Monthly Payout are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Akros Monthly may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Aptus Defined and Akros Monthly Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aptus Defined and Akros Monthly

The main advantage of trading using opposite Aptus Defined and Akros Monthly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptus Defined position performs unexpectedly, Akros Monthly 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 Akros Monthly will offset losses from the drop in Akros Monthly's long position.
The idea behind Aptus Defined Risk and Akros Monthly Payout 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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