Correlation Between Aptos and Celo

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

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

Diversification Opportunities for Aptos and Celo

0.75

Correlation Coefficient

Aptos  Celo

Poor diversification

The 3 months correlation between Aptos and Celo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aptos and Celo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celo 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 Celo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celo has no effect on the direction of Aptos i.e., Aptos and Celo go up and down completely randomly.

Pair Corralation between Aptos and Celo

Assuming the 90 days trading horizon Aptos is expected to generate 1.05 times more return on investment than Celo. However, Aptos is 1.05 times more volatile than Celo. It trades about 0.07 of its potential returns per unit of risk. Celo is currently generating about 0.0 per unit of risk. If you would invest  909.00  in Aptos on August 25, 2024 and sell it today you would earn a total of  329.00  from holding Aptos or generate 36.19% return on investment over 90 days.

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

Aptos  vs.  Celo

Aptos

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aptos are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Aptos exhibited solid returns over the last few months and may actually be approaching a breakup point.

Celo

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Celo are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Celo exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aptos and Celo

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

The idea behind Aptos and Celo 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.