Correlation Between Oriental Food and Apollo Food
Can any of the company-specific risk be diversified away by investing in both Oriental Food and Apollo 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 Oriental Food and Apollo Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Food Industries and Apollo Food Holdings, you can compare the effects of market volatilities on Oriental Food and Apollo 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 Oriental Food with a short position of Apollo Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Food and Apollo Food.
Diversification Opportunities for Oriental Food and Apollo Food
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oriental and Apollo is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Food Industries and Apollo Food Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Food Holdings and Oriental 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 Oriental Food Industries are associated (or correlated) with Apollo Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Food Holdings has no effect on the direction of Oriental Food i.e., Oriental Food and Apollo Food go up and down completely randomly.
Pair Corralation between Oriental Food and Apollo Food
Assuming the 90 days trading horizon Oriental Food Industries is expected to under-perform the Apollo Food. But the stock apears to be less risky and, when comparing its historical volatility, Oriental Food Industries is 1.21 times less risky than Apollo Food. The stock trades about -0.01 of its potential returns per unit of risk. The Apollo Food Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 501.00 in Apollo Food Holdings on November 3, 2024 and sell it today you would earn a total of 162.00 from holding Apollo Food Holdings or generate 32.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Oriental Food Industries vs. Apollo Food Holdings
Performance |
| Timeline |
| Oriental Food Industries |
| Apollo Food Holdings |
Oriental Food and Apollo Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Food and Apollo Food
The main advantage of trading using opposite Oriental Food and Apollo Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Food position performs unexpectedly, Apollo 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 Apollo Food will offset losses from the drop in Apollo Food's long position.| Oriental Food vs. Binasat Communications Bhd | Oriental Food vs. Carlsberg Brewery Malaysia | Oriental Food vs. Sports Toto Berhad | Oriental Food vs. Sunway Construction Group |
| Apollo Food vs. Farm Price Holdings | Apollo Food vs. RHB Bank Bhd | Apollo Food vs. Sunway Construction Group | Apollo Food vs. Bank Islam Malaysia |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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