Correlation Between Apollo Medical and Nippon Light
Can any of the company-specific risk be diversified away by investing in both Apollo Medical and Nippon Light 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 Nippon Light 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 Nippon Light Metal, you can compare the effects of market volatilities on Apollo Medical and Nippon Light 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 Nippon Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Medical and Nippon Light.
Diversification Opportunities for Apollo Medical and Nippon Light
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Apollo and Nippon is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical Holdings and Nippon Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Light Metal 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 Nippon Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Light Metal has no effect on the direction of Apollo Medical i.e., Apollo Medical and Nippon Light go up and down completely randomly.
Pair Corralation between Apollo Medical and Nippon Light
Assuming the 90 days horizon Apollo Medical Holdings is expected to generate 1.88 times more return on investment than Nippon Light. However, Apollo Medical is 1.88 times more volatile than Nippon Light Metal. It trades about 0.2 of its potential returns per unit of risk. Nippon Light Metal is currently generating about 0.16 per unit of risk. If you would invest 3,060 in Apollo Medical Holdings on November 7, 2024 and sell it today you would earn a total of 400.00 from holding Apollo Medical Holdings or generate 13.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Apollo Medical Holdings vs. Nippon Light Metal
Performance |
| Timeline |
| Apollo Medical Holdings |
| Nippon Light Metal |
Apollo Medical and Nippon Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Medical and Nippon Light
The main advantage of trading using opposite Apollo Medical and Nippon Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Medical position performs unexpectedly, Nippon Light 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 Nippon Light will offset losses from the drop in Nippon Light's long position.| Apollo Medical vs. Aristocrat Leisure Limited | Apollo Medical vs. Columbia Sportswear | Apollo Medical vs. CHINA TONTINE WINES | Apollo Medical vs. Pembina Pipeline Corp |
| Nippon Light vs. FIREWEED METALS P | Nippon Light vs. Eidesvik Offshore ASA | Nippon Light vs. PARKEN Sport Entertainment | Nippon Light vs. WT OFFSHORE |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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