Correlation Between Apollo Medical and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both Apollo Medical and Lifeway Foods 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 Lifeway Foods 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 Lifeway Foods, you can compare the effects of market volatilities on Apollo Medical and Lifeway Foods 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 Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Medical and Lifeway Foods.
Diversification Opportunities for Apollo Medical and Lifeway Foods
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Apollo and Lifeway is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical Holdings and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods 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 Lifeway Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifeway Foods has no effect on the direction of Apollo Medical i.e., Apollo Medical and Lifeway Foods go up and down completely randomly.
Pair Corralation between Apollo Medical and Lifeway Foods
Assuming the 90 days horizon Apollo Medical is expected to generate 6.61 times less return on investment than Lifeway Foods. But when comparing it to its historical volatility, Apollo Medical Holdings is 3.12 times less risky than Lifeway Foods. It trades about 0.04 of its potential returns per unit of risk. Lifeway Foods is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 555.00 in Lifeway Foods on August 31, 2024 and sell it today you would earn a total of 1,785 from holding Lifeway Foods or generate 321.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Medical Holdings vs. Lifeway Foods
Performance |
| Timeline |
| Apollo Medical Holdings |
| Lifeway Foods |
Apollo Medical and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Medical and Lifeway Foods
The main advantage of trading using opposite Apollo Medical and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Medical position performs unexpectedly, Lifeway Foods 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 Lifeway Foods will offset losses from the drop in Lifeway Foods' long position.| Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc |
| Lifeway Foods vs. Danone SA | Lifeway Foods vs. Superior Plus Corp | Lifeway Foods vs. NMI Holdings | Lifeway Foods vs. Origin Agritech |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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