Correlation Between Apollo Food and Eversafe Rubber
Can any of the company-specific risk be diversified away by investing in both Apollo Food and Eversafe Rubber 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 Food and Eversafe Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Food Holdings and Eversafe Rubber Bhd, you can compare the effects of market volatilities on Apollo Food and Eversafe Rubber 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 Food with a short position of Eversafe Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Food and Eversafe Rubber.
Diversification Opportunities for Apollo Food and Eversafe Rubber
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Apollo and Eversafe is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Food Holdings and Eversafe Rubber Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eversafe Rubber Bhd and Apollo Food 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 Food Holdings are associated (or correlated) with Eversafe Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eversafe Rubber Bhd has no effect on the direction of Apollo Food i.e., Apollo Food and Eversafe Rubber go up and down completely randomly.
Pair Corralation between Apollo Food and Eversafe Rubber
Assuming the 90 days trading horizon Apollo Food Holdings is expected to generate 0.57 times more return on investment than Eversafe Rubber. However, Apollo Food Holdings is 1.74 times less risky than Eversafe Rubber. It trades about 0.07 of its potential returns per unit of risk. Eversafe Rubber Bhd is currently generating about -0.02 per unit of risk. If you would invest 472.00 in Apollo Food Holdings on August 27, 2024 and sell it today you would earn a total of 178.00 from holding Apollo Food Holdings or generate 37.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Food Holdings vs. Eversafe Rubber Bhd
Performance |
| Timeline |
| Apollo Food Holdings |
| Eversafe Rubber Bhd |
Apollo Food and Eversafe Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Food and Eversafe Rubber
The main advantage of trading using opposite Apollo Food and Eversafe Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Food position performs unexpectedly, Eversafe Rubber 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 Eversafe Rubber will offset losses from the drop in Eversafe Rubber's long position.The idea behind Apollo Food Holdings and Eversafe Rubber Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Eversafe Rubber vs. Press Metal Bhd | Eversafe Rubber vs. Choo Bee Metal | Eversafe Rubber vs. Melewar Industrial Group | Eversafe Rubber vs. Eonmetall Group Bhd |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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