Correlation Between Aprogen Healthcare and Ecocab

Can any of the company-specific risk be diversified away by investing in both Aprogen Healthcare and Ecocab 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 Ecocab 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 Ecocab Co, you can compare the effects of market volatilities on Aprogen Healthcare and Ecocab 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 Ecocab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aprogen Healthcare and Ecocab.

Diversification Opportunities for Aprogen Healthcare and Ecocab

-0.33

Correlation Coefficient

Aprogen Healthcare  Ecocab

Very good diversification

The 3 months correlation between Aprogen and Ecocab is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games and Ecocab Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecocab 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 Ecocab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecocab has no effect on the direction of Aprogen Healthcare i.e., Aprogen Healthcare and Ecocab go up and down completely randomly.

Pair Corralation between Aprogen Healthcare and Ecocab

Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to under-perform the Ecocab. But the stock apears to be less risky and, when comparing its historical volatility, Aprogen Healthcare Games is 1.71 times less risky than Ecocab. The stock trades about -0.08 of its potential returns per unit of risk. The Ecocab Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  138,600  in Ecocab Co on September 12, 2024 and sell it today you would earn a total of  10,400  from holding Ecocab Co or generate 7.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aprogen Healthcare Games  vs.  Ecocab 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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ecocab

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ecocab Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ecocab sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aprogen Healthcare and Ecocab

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

The idea behind Aprogen Healthcare Games and Ecocab 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.