Correlation Between Aptos and PMA

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

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

Diversification Opportunities for Aptos and PMA

-0.62

Correlation Coefficient

Aptos  PMA

Excellent diversification

The 3 months correlation between Aptos and PMA is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Aptos and PMA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PMA 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 PMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PMA has no effect on the direction of Aptos i.e., Aptos and PMA go up and down completely randomly.

Pair Corralation between Aptos and PMA

Assuming the 90 days trading horizon Aptos is expected to generate 13.55 times less return on investment than PMA. But when comparing it to its historical volatility, Aptos is 8.71 times less risky than PMA. It trades about 0.1 of its potential returns per unit of risk. PMA is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.00  in PMA on February 28, 2024 and sell it today you would earn a total of  0.00  from holding PMA or generate 33.33% return on investment over 90 days.

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

Aptos  vs.  PMA

Aptos

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aptos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Aptos shareholders.

PMA

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PMA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, PMA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aptos and PMA

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

The idea behind Aptos and PMA 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.