Correlation Between Greatech Technology and Apollo Food

Can any of the company-specific risk be diversified away by investing in both Greatech Technology 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 Greatech Technology and Apollo Food into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Greatech Technology Bhd and Apollo Food Holdings, you can compare the effects of market volatilities on Greatech Technology 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 Greatech Technology with a short position of Apollo Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatech Technology and Apollo Food.

Diversification Opportunities for Greatech Technology and Apollo Food

0.42

Correlation Coefficient

Greatech Technology  Apollo Food

Very weak diversification

The 3 months correlation between Greatech and Apollo is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Greatech Technology Bhd 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 Greatech Technology 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 Greatech Technology Bhd 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 Greatech Technology i.e., Greatech Technology and Apollo Food go up and down completely randomly.

Pair Corralation between Greatech Technology and Apollo Food

Assuming the 90 days trading horizon Greatech Technology is expected to generate 3.98 times less return on investment than Apollo Food. But when comparing it to its historical volatility, Greatech Technology Bhd is 1.16 times less risky than Apollo Food. It trades about 0.02 of its potential returns per unit of risk. Apollo Food Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  351.00  in Apollo Food Holdings on October 3, 2024 and sell it today you would earn a total of  319.00  from holding Apollo Food Holdings or generate 90.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.48%
Values	Daily Returns

Greatech Technology Bhd  vs.  Apollo Food Holdings

Greatech Technology Bhd

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Greatech Technology Bhd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Greatech Technology disclosed solid returns over the last few months and may actually be approaching a breakup point.

Apollo Food Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Food Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Greatech Technology and Apollo Food

The main advantage of trading using opposite Greatech Technology and Apollo Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatech Technology 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 Greatech Technology Bhd 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.