Correlation Between E Investment and APS Holdings

Can any of the company-specific risk be diversified away by investing in both E Investment and APS Holdings 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 E Investment and APS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between E Investment Development and APS Holdings, you can compare the effects of market volatilities on E Investment and APS Holdings 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 E Investment with a short position of APS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Investment and APS Holdings.

Diversification Opportunities for E Investment and APS Holdings

0.0

Correlation Coefficient

E Investment  APS Holdings

Pay attention - limited upside

The 3 months correlation between 093230 and APS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding E Investment Development and APS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APS Holdings and E Investment 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 E Investment Development are associated (or correlated) with APS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APS Holdings has no effect on the direction of E Investment i.e., E Investment and APS Holdings go up and down completely randomly.

Pair Corralation between E Investment and APS Holdings

If you would invest  544,000  in APS Holdings on September 12, 2024 and sell it today you would earn a total of  1,000.00  from holding APS Holdings or generate 0.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

E Investment Development  vs.  APS Holdings

E Investment Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E Investment Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, E Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

APS Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days APS Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, APS Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with E Investment and APS Holdings

The main advantage of trading using opposite E Investment and APS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Investment position performs unexpectedly, APS Holdings 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 APS Holdings will offset losses from the drop in APS Holdings' long position.

The idea behind E Investment Development and APS 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.