Correlation Between Apex Frozen and Banka BioLoo
Can any of the company-specific risk be diversified away by investing in both Apex Frozen and Banka BioLoo 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 Frozen and Banka BioLoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apex Frozen Foods and Banka BioLoo Limited, you can compare the effects of market volatilities on Apex Frozen and Banka BioLoo 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 Frozen with a short position of Banka BioLoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apex Frozen and Banka BioLoo.
Diversification Opportunities for Apex Frozen and Banka BioLoo
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apex and Banka is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Apex Frozen Foods and Banka BioLoo Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banka BioLoo Limited and Apex Frozen 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 Frozen Foods are associated (or correlated) with Banka BioLoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banka BioLoo Limited has no effect on the direction of Apex Frozen i.e., Apex Frozen and Banka BioLoo go up and down completely randomly.
Pair Corralation between Apex Frozen and Banka BioLoo
Assuming the 90 days trading horizon Apex Frozen Foods is expected to generate 1.28 times more return on investment than Banka BioLoo. However, Apex Frozen is 1.28 times more volatile than Banka BioLoo Limited. It trades about -0.01 of its potential returns per unit of risk. Banka BioLoo Limited is currently generating about -0.27 per unit of risk. If you would invest 23,994 in Apex Frozen Foods on September 1, 2024 and sell it today you would lose (419.00) from holding Apex Frozen Foods or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Apex Frozen Foods vs. Banka BioLoo Limited
Performance |
| Timeline |
| Apex Frozen Foods |
| Banka BioLoo Limited |
Apex Frozen and Banka BioLoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apex Frozen and Banka BioLoo
The main advantage of trading using opposite Apex Frozen and Banka BioLoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apex Frozen position performs unexpectedly, Banka BioLoo 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 Banka BioLoo will offset losses from the drop in Banka BioLoo's long position.| Apex Frozen vs. Meghmani Organics Limited | Apex Frozen vs. Man Infraconstruction Limited | Apex Frozen vs. Coffee Day Enterprises | Apex Frozen vs. Agro Tech Foods |
| Banka BioLoo vs. EIH Associated Hotels | Banka BioLoo vs. EMBASSY OFFICE PARKS | Banka BioLoo vs. Dev Information Technology | Banka BioLoo vs. Royal Orchid Hotels |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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