Correlation Between Femasys and AptarGroup

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

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

Diversification Opportunities for Femasys and AptarGroup

0.77

Correlation Coefficient

Femasys  AptarGroup

Poor diversification

The 3 months correlation between Femasys and AptarGroup is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Femasys and AptarGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptarGroup and Femasys 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 Femasys are associated (or correlated) with AptarGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AptarGroup has no effect on the direction of Femasys i.e., Femasys and AptarGroup go up and down completely randomly.

Pair Corralation between Femasys and AptarGroup

Given the investment horizon of 90 days Femasys is expected to under-perform the AptarGroup. In addition to that, Femasys is 4.12 times more volatile than AptarGroup. It trades about -0.36 of its total potential returns per unit of risk. AptarGroup is currently generating about 0.17 per unit of volatility. If you would invest  14,187  in AptarGroup on January 31, 2024 and sell it today you would earn a total of  451.00  from holding AptarGroup or generate 3.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Femasys  vs.  AptarGroup

Femasys

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Femasys are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain primary indicators, Femasys showed solid returns over the last few months and may actually be approaching a breakup point.

AptarGroup

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AptarGroup are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, AptarGroup reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Femasys and AptarGroup

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

The idea behind Femasys and AptarGroup 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.