Correlation Between Apollo Medical and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both Apollo Medical and SENECA FOODS-A 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 SENECA FOODS-A 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 SENECA FOODS A, you can compare the effects of market volatilities on Apollo Medical and SENECA FOODS-A 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 SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Medical and SENECA FOODS-A.
Diversification Opportunities for Apollo Medical and SENECA FOODS-A
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apollo and SENECA is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical Holdings and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of Apollo Medical i.e., Apollo Medical and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between Apollo Medical and SENECA FOODS-A
Assuming the 90 days horizon Apollo Medical is expected to generate 13.25 times less return on investment than SENECA FOODS-A. But when comparing it to its historical volatility, Apollo Medical Holdings is 1.42 times less risky than SENECA FOODS-A. It trades about 0.01 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,680 in SENECA FOODS A on September 1, 2024 and sell it today you would earn a total of 1,770 from holding SENECA FOODS A or generate 37.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Medical Holdings vs. SENECA FOODS A
Performance |
| Timeline |
| Apollo Medical Holdings |
| SENECA FOODS A |
Apollo Medical and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Medical and SENECA FOODS-A
The main advantage of trading using opposite Apollo Medical and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Medical position performs unexpectedly, SENECA FOODS-A 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 SENECA FOODS-A will offset losses from the drop in SENECA FOODS-A's long position.| Apollo Medical vs. WillScot Mobile Mini | Apollo Medical vs. Iridium Communications | Apollo Medical vs. Rogers Communications | Apollo Medical vs. Zijin Mining Group |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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