Correlation Between Rubberex M and Apollo Food

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Can any of the company-specific risk be diversified away by investing in both Rubberex M 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 Rubberex M and Apollo Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rubberex M and Apollo Food Holdings, you can compare the effects of market volatilities on Rubberex M 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 Rubberex M with a short position of Apollo Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubberex M and Apollo Food.

Diversification Opportunities for Rubberex M and Apollo Food

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between Rubberex and Apollo is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Rubberex M 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 Rubberex M 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 Rubberex M 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 Rubberex M i.e., Rubberex M and Apollo Food go up and down completely randomly.

Pair Corralation between Rubberex M and Apollo Food

Assuming the 90 days trading horizon Rubberex M is expected to generate 5.84 times more return on investment than Apollo Food. However, Rubberex M is 5.84 times more volatile than Apollo Food Holdings. It trades about 0.01 of its potential returns per unit of risk. Apollo Food Holdings is currently generating about -0.26 per unit of risk. If you would invest  18.00  in Rubberex M on September 1, 2024 and sell it today you would earn a total of  0.00  from holding Rubberex M or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Rubberex M  vs.  Apollo Food Holdings

 Performance 
       Timeline  
Rubberex M 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Rubberex M has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Rubberex M is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Apollo Food Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Apollo Food Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Apollo Food is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Rubberex M and Apollo Food Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Rubberex M and Apollo Food

The main advantage of trading using opposite Rubberex M and Apollo Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubberex M 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.
The idea behind Rubberex M and Apollo Food Holdings 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.
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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