Correlation Between Apollo Food and Oriental Food
Can any of the company-specific risk be diversified away by investing in both Apollo Food and Oriental Food 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 Oriental Food 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 Oriental Food Industries, you can compare the effects of market volatilities on Apollo Food and Oriental Food 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 Oriental Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Food and Oriental Food.
Diversification Opportunities for Apollo Food and Oriental Food
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apollo and Oriental is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Food Holdings and Oriental Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Food Industries 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 Oriental Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Food Industries has no effect on the direction of Apollo Food i.e., Apollo Food and Oriental Food go up and down completely randomly.
Pair Corralation between Apollo Food and Oriental Food
Assuming the 90 days trading horizon Apollo Food Holdings is expected to generate 0.2 times more return on investment than Oriental Food. However, Apollo Food Holdings is 4.98 times less risky than Oriental Food. It trades about 0.16 of its potential returns per unit of risk. Oriental Food Industries is currently generating about -0.2 per unit of risk. If you would invest 655.00 in Apollo Food Holdings on November 3, 2024 and sell it today you would earn a total of 8.00 from holding Apollo Food Holdings or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Food Holdings vs. Oriental Food Industries
Performance |
| Timeline |
| Apollo Food Holdings |
| Oriental Food Industries |
Apollo Food and Oriental Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Food and Oriental Food
The main advantage of trading using opposite Apollo Food and Oriental Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Food position performs unexpectedly, Oriental Food 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 Oriental Food will offset losses from the drop in Oriental Food's long position.| Apollo Food vs. Farm Price Holdings | Apollo Food vs. RHB Bank Bhd | Apollo Food vs. Sunway Construction Group | Apollo Food vs. Bank Islam Malaysia |
| Oriental Food vs. Binasat Communications Bhd | Oriental Food vs. Carlsberg Brewery Malaysia | Oriental Food vs. Sports Toto Berhad | Oriental Food vs. Sunway Construction 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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