Correlation Between Apex Healthcare and British American
Can any of the company-specific risk be diversified away by investing in both Apex Healthcare and British American 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 Healthcare and British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apex Healthcare Bhd and British American Tobacco, you can compare the effects of market volatilities on Apex Healthcare and British American 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 Healthcare with a short position of British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apex Healthcare and British American.
Diversification Opportunities for Apex Healthcare and British American
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apex and British is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Apex Healthcare Bhd and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco and Apex Healthcare 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 Healthcare Bhd are associated (or correlated) with British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of Apex Healthcare i.e., Apex Healthcare and British American go up and down completely randomly.
Pair Corralation between Apex Healthcare and British American
Assuming the 90 days trading horizon Apex Healthcare Bhd is expected to generate 1.79 times more return on investment than British American. However, Apex Healthcare is 1.79 times more volatile than British American Tobacco. It trades about -0.12 of its potential returns per unit of risk. British American Tobacco is currently generating about -0.32 per unit of risk. If you would invest 249.00 in Apex Healthcare Bhd on November 5, 2024 and sell it today you would lose (6.00) from holding Apex Healthcare Bhd or give up 2.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apex Healthcare Bhd vs. British American Tobacco
Performance |
| Timeline |
| Apex Healthcare Bhd |
| British American Tobacco |
Apex Healthcare and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apex Healthcare and British American
The main advantage of trading using opposite Apex Healthcare and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apex Healthcare position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| Apex Healthcare vs. Sunway Construction Group | Apex Healthcare vs. CSC Steel Holdings | Apex Healthcare vs. FARM FRESH BERHAD | Apex Healthcare vs. Southern Steel Bhd |
| British American vs. Shangri La Hotels | British American vs. Choo Bee Metal | British American vs. Apollo Food Holdings | British American vs. YX Precious Metals |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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