Correlation Between JAPAN TOBACCO and Apollo Medical
Can any of the company-specific risk be diversified away by investing in both JAPAN TOBACCO and Apollo Medical 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 JAPAN TOBACCO and Apollo Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN TOBACCO UNSPADR12 and Apollo Medical Holdings, you can compare the effects of market volatilities on JAPAN TOBACCO and Apollo Medical 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 JAPAN TOBACCO with a short position of Apollo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN TOBACCO and Apollo Medical.
Diversification Opportunities for JAPAN TOBACCO and Apollo Medical
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JAPAN and Apollo is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN TOBACCO UNSPADR12 and Apollo Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Medical Holdings and JAPAN TOBACCO 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 JAPAN TOBACCO UNSPADR12 are associated (or correlated) with Apollo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Medical Holdings has no effect on the direction of JAPAN TOBACCO i.e., JAPAN TOBACCO and Apollo Medical go up and down completely randomly.
Pair Corralation between JAPAN TOBACCO and Apollo Medical
Assuming the 90 days trading horizon JAPAN TOBACCO is expected to generate 2.74 times less return on investment than Apollo Medical. But when comparing it to its historical volatility, JAPAN TOBACCO UNSPADR12 is 1.69 times less risky than Apollo Medical. It trades about 0.05 of its potential returns per unit of risk. Apollo Medical Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,580 in Apollo Medical Holdings on September 13, 2024 and sell it today you would earn a total of 160.00 from holding Apollo Medical Holdings or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN TOBACCO UNSPADR12 vs. Apollo Medical Holdings
Performance |
| Timeline |
| JAPAN TOBACCO UNSPADR12 |
| Apollo Medical Holdings |
JAPAN TOBACCO and Apollo Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN TOBACCO and Apollo Medical
The main advantage of trading using opposite JAPAN TOBACCO and Apollo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN TOBACCO position performs unexpectedly, Apollo Medical 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 Medical will offset losses from the drop in Apollo Medical's long position.| JAPAN TOBACCO vs. MCEWEN MINING INC | JAPAN TOBACCO vs. GALENA MINING LTD | JAPAN TOBACCO vs. GRIFFIN MINING LTD | JAPAN TOBACCO vs. Calibre Mining Corp |
| Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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