Correlation Between Apollo Medical and Tyson Foods
Can any of the company-specific risk be diversified away by investing in both Apollo Medical and Tyson 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 Tyson 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 Tyson Foods, you can compare the effects of market volatilities on Apollo Medical and Tyson 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 Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Medical and Tyson Foods.
Diversification Opportunities for Apollo Medical and Tyson Foods
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apollo and Tyson is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical Holdings and Tyson Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson 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 Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods has no effect on the direction of Apollo Medical i.e., Apollo Medical and Tyson Foods go up and down completely randomly.
Pair Corralation between Apollo Medical and Tyson Foods
Assuming the 90 days horizon Apollo Medical is expected to generate 1.17 times less return on investment than Tyson Foods. In addition to that, Apollo Medical is 1.1 times more volatile than Tyson Foods. It trades about 0.04 of its total potential returns per unit of risk. Tyson Foods is currently generating about 0.06 per unit of volatility. If you would invest 4,504 in Tyson Foods on August 31, 2024 and sell it today you would earn a total of 1,589 from holding Tyson Foods or generate 35.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Medical Holdings vs. Tyson Foods
Performance |
| Timeline |
| Apollo Medical Holdings |
| Tyson Foods |
Apollo Medical and Tyson Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Medical and Tyson Foods
The main advantage of trading using opposite Apollo Medical and Tyson Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Medical position performs unexpectedly, Tyson 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 Tyson Foods will offset losses from the drop in Tyson Foods' long position.| Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc |
| Tyson Foods vs. SalMar ASA | Tyson Foods vs. Superior Plus Corp | Tyson Foods vs. NMI Holdings | Tyson 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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