Correlation Between Apollo Food and Hengyuan Refining
Can any of the company-specific risk be diversified away by investing in both Apollo Food and Hengyuan Refining 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 Hengyuan Refining 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 Hengyuan Refining, you can compare the effects of market volatilities on Apollo Food and Hengyuan Refining 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 Hengyuan Refining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Food and Hengyuan Refining.
Diversification Opportunities for Apollo Food and Hengyuan Refining
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apollo and Hengyuan is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Food Holdings and Hengyuan Refining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengyuan Refining 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 Hengyuan Refining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengyuan Refining has no effect on the direction of Apollo Food i.e., Apollo Food and Hengyuan Refining go up and down completely randomly.
Pair Corralation between Apollo Food and Hengyuan Refining
Assuming the 90 days trading horizon Apollo Food Holdings is expected to generate 0.9 times more return on investment than Hengyuan Refining. However, Apollo Food Holdings is 1.11 times less risky than Hengyuan Refining. It trades about 0.08 of its potential returns per unit of risk. Hengyuan Refining is currently generating about -0.05 per unit of risk. If you would invest 368.00 in Apollo Food Holdings on August 27, 2024 and sell it today you would earn a total of 282.00 from holding Apollo Food Holdings or generate 76.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.55% |
| Values | Daily Returns |
Apollo Food Holdings vs. Hengyuan Refining
Performance |
| Timeline |
| Apollo Food Holdings |
| Hengyuan Refining |
Apollo Food and Hengyuan Refining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Food and Hengyuan Refining
The main advantage of trading using opposite Apollo Food and Hengyuan Refining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Food position performs unexpectedly, Hengyuan Refining 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 Hengyuan Refining will offset losses from the drop in Hengyuan Refining's long position.| Apollo Food vs. Duopharma Biotech Bhd | Apollo Food vs. Farm Price Holdings | Apollo Food vs. PMB Technology Bhd | Apollo Food vs. Kawan Food Bhd |
| Hengyuan Refining vs. Techfast Holdings Bhd | Hengyuan Refining vs. Digistar Bhd | Hengyuan Refining vs. Minetech Resources Bhd | Hengyuan Refining vs. OpenSys M 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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