Correlation Between APEX International and De Licacy
Can any of the company-specific risk be diversified away by investing in both APEX International and De Licacy 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 APEX International and De Licacy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APEX International Financial and De Licacy Industrial, you can compare the effects of market volatilities on APEX International and De Licacy 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 APEX International with a short position of De Licacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of APEX International and De Licacy.
Diversification Opportunities for APEX International and De Licacy
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between APEX and 1464 is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding APEX International Financial and De Licacy Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Licacy Industrial and APEX International 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 APEX International Financial are associated (or correlated) with De Licacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Licacy Industrial has no effect on the direction of APEX International i.e., APEX International and De Licacy go up and down completely randomly.
Pair Corralation between APEX International and De Licacy
Assuming the 90 days trading horizon APEX International Financial is expected to under-perform the De Licacy. But the stock apears to be less risky and, when comparing its historical volatility, APEX International Financial is 1.45 times less risky than De Licacy. The stock trades about -0.16 of its potential returns per unit of risk. The De Licacy Industrial is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,620 in De Licacy Industrial on September 3, 2024 and sell it today you would lose (65.00) from holding De Licacy Industrial or give up 4.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
APEX International Financial vs. De Licacy Industrial
Performance |
| Timeline |
| APEX International |
| De Licacy Industrial |
APEX International and De Licacy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APEX International and De Licacy
The main advantage of trading using opposite APEX International and De Licacy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APEX International position performs unexpectedly, De Licacy 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 De Licacy will offset losses from the drop in De Licacy's long position.| APEX International vs. Mitake Information | APEX International vs. YuantaP shares Taiwan Mid Cap | APEX International vs. YuantaP shares Taiwan Electronics | APEX International vs. YuantaP shares Taiwan Top |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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