Correlation Between AVITA Medical and Apollo Medical
Can any of the company-specific risk be diversified away by investing in both AVITA Medical and Apollo Medical 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 AVITA Medical and Apollo Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVITA Medical and Apollo Medical Holdings, you can compare the effects of market volatilities on AVITA Medical and Apollo Medical 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 AVITA Medical with a short position of Apollo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVITA Medical and Apollo Medical.
Diversification Opportunities for AVITA Medical and Apollo Medical
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AVITA and Apollo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding AVITA Medical and Apollo Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Medical Holdings and AVITA 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 AVITA Medical are associated (or correlated) with Apollo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Medical Holdings has no effect on the direction of AVITA Medical i.e., AVITA Medical and Apollo Medical go up and down completely randomly.
Pair Corralation between AVITA Medical and Apollo Medical
Assuming the 90 days trading horizon AVITA Medical is expected to under-perform the Apollo Medical. In addition to that, AVITA Medical is 2.63 times more volatile than Apollo Medical Holdings. It trades about -0.02 of its total potential returns per unit of risk. Apollo Medical Holdings is currently generating about 0.01 per unit of volatility. If you would invest 3,980 in Apollo Medical Holdings on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Apollo Medical Holdings or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVITA Medical vs. Apollo Medical Holdings
Performance |
| Timeline |
| AVITA Medical |
| Apollo Medical Holdings |
AVITA Medical and Apollo Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVITA Medical and Apollo Medical
The main advantage of trading using opposite AVITA Medical and Apollo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVITA Medical position performs unexpectedly, Apollo Medical 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 Apollo Medical will offset losses from the drop in Apollo Medical's long position.| AVITA Medical vs. Perma Fix Environmental Services | AVITA Medical vs. RELIANCE STEEL AL | AVITA Medical vs. Caltagirone SpA | AVITA Medical vs. Reliance Steel Aluminum |
| Apollo Medical vs. WillScot Mobile Mini | Apollo Medical vs. Iridium Communications | Apollo Medical vs. Rogers Communications | Apollo Medical vs. Zijin Mining 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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