Correlation Between Apollo Food and Axiata Group
Can any of the company-specific risk be diversified away by investing in both Apollo Food and Axiata Group 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 Axiata Group 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 Axiata Group Bhd, you can compare the effects of market volatilities on Apollo Food and Axiata Group 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 Axiata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Food and Axiata Group.
Diversification Opportunities for Apollo Food and Axiata Group
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Apollo and Axiata is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Food Holdings and Axiata Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiata Group 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 Axiata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiata Group Bhd has no effect on the direction of Apollo Food i.e., Apollo Food and Axiata Group go up and down completely randomly.
Pair Corralation between Apollo Food and Axiata Group
Assuming the 90 days trading horizon Apollo Food Holdings is expected to generate 0.8 times more return on investment than Axiata Group. However, Apollo Food Holdings is 1.25 times less risky than Axiata Group. It trades about -0.04 of its potential returns per unit of risk. Axiata Group Bhd is currently generating about -0.06 per unit of risk. If you would invest 676.00 in Apollo Food Holdings on September 5, 2024 and sell it today you would lose (43.00) from holding Apollo Food Holdings or give up 6.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Food Holdings vs. Axiata Group Bhd
Performance |
| Timeline |
| Apollo Food Holdings |
| Axiata Group Bhd |
Apollo Food and Axiata Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Food and Axiata Group
The main advantage of trading using opposite Apollo Food and Axiata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Food position performs unexpectedly, Axiata Group 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 Axiata Group will offset losses from the drop in Axiata Group's long position.The idea behind Apollo Food Holdings and Axiata Group 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.| Axiata Group vs. Petronas Chemicals Group | Axiata Group vs. YX Precious Metals | Axiata Group vs. Apollo Food Holdings | Axiata Group vs. Oriental Food Industries |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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