Correlation Between N Citron and APS Holdings

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

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

Diversification Opportunities for N Citron and APS Holdings

-0.46

Correlation Coefficient

N Citron  APS Holdings

Very good diversification

The 3 months correlation between 101400 and APS is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding N Citron and APS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APS Holdings and N Citron 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 N Citron 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 N Citron i.e., N Citron and APS Holdings go up and down completely randomly.

Pair Corralation between N Citron and APS Holdings

Assuming the 90 days trading horizon N Citron is expected to generate 1.06 times more return on investment than APS Holdings. However, N Citron is 1.06 times more volatile than APS Holdings. It trades about -0.09 of its potential returns per unit of risk. APS Holdings is currently generating about -0.38 per unit of risk. If you would invest  41,400  in N Citron on September 4, 2024 and sell it today you would lose (1,400) from holding N Citron or give up 3.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

N Citron  vs.  APS Holdings

N Citron

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days N Citron has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

APS Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in APS Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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 N Citron and APS Holdings

The main advantage of trading using opposite N Citron and APS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if N Citron 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 N Citron 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 CEOs Directory module to screen CEOs from public companies around the world.