Correlation Between Apollo Medical and BHP Group
Can any of the company-specific risk be diversified away by investing in both Apollo Medical and BHP Group 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 Apollo Medical and BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Medical Holdings and BHP Group Limited, you can compare the effects of market volatilities on Apollo Medical and BHP Group 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 Apollo Medical with a short position of BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Medical and BHP Group.
Diversification Opportunities for Apollo Medical and BHP Group
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apollo and BHP is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical Holdings and BHP Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHP Group Limited and Apollo Medical 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 Apollo Medical Holdings are associated (or correlated) with BHP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHP Group Limited has no effect on the direction of Apollo Medical i.e., Apollo Medical and BHP Group go up and down completely randomly.
Pair Corralation between Apollo Medical and BHP Group
Assuming the 90 days horizon Apollo Medical Holdings is expected to generate 1.38 times more return on investment than BHP Group. However, Apollo Medical is 1.38 times more volatile than BHP Group Limited. It trades about -0.04 of its potential returns per unit of risk. BHP Group Limited is currently generating about -0.07 per unit of risk. If you would invest 3,580 in Apollo Medical Holdings on September 19, 2024 and sell it today you would lose (140.00) from holding Apollo Medical Holdings or give up 3.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Medical Holdings vs. BHP Group Limited
Performance |
| Timeline |
| Apollo Medical Holdings |
| BHP Group Limited |
Apollo Medical and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Medical and BHP Group
The main advantage of trading using opposite Apollo Medical and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Medical position performs unexpectedly, BHP Group 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 BHP Group will offset losses from the drop in BHP Group's long position.| Apollo Medical vs. Ryanair Holdings plc | Apollo Medical vs. Carsales | Apollo Medical vs. Corsair Gaming | Apollo Medical vs. Geely Automobile Holdings |
| BHP Group vs. SAFETY MEDICAL PROD | BHP Group vs. Apollo Medical Holdings | BHP Group vs. Pembina Pipeline Corp | BHP Group vs. Major Drilling Group |
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 the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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