Correlation Between Aprogen Healthcare and Humax Holdings

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

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

Diversification Opportunities for Aprogen Healthcare and Humax Holdings

0.47

Correlation Coefficient

Aprogen Healthcare  Humax Holdings

Very weak diversification

The 3 months correlation between Aprogen and Humax is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games and Humax Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humax Holdings and Aprogen Healthcare 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 Aprogen Healthcare Games are associated (or correlated) with Humax Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humax Holdings has no effect on the direction of Aprogen Healthcare i.e., Aprogen Healthcare and Humax Holdings go up and down completely randomly.

Pair Corralation between Aprogen Healthcare and Humax Holdings

Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to under-perform the Humax Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Aprogen Healthcare Games is 1.12 times less risky than Humax Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Humax Holdings Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  331,500  in Humax Holdings Co on October 10, 2024 and sell it today you would lose (82,000) from holding Humax Holdings Co or give up 24.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.08%
Values	Daily Returns

Aprogen Healthcare Games  vs.  Humax Holdings Co

Aprogen Healthcare Games

Risk-Adjusted Performance

0 of 100

Very Weak

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

Humax Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Humax Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Humax 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 Aprogen Healthcare and Humax Holdings

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

The idea behind Aprogen Healthcare Games and Humax Holdings Co 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.