Correlation Between Apollo Medical and EON SE

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

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

Diversification Opportunities for Apollo Medical and EON SE

-0.42

Correlation Coefficient

Apollo Medical  EON SE

Very good diversification

The 3 months correlation between Apollo and EON is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical Holdings and EON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON SE and Apollo Medical 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 Apollo Medical Holdings are associated (or correlated) with EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE has no effect on the direction of Apollo Medical i.e., Apollo Medical and EON SE go up and down completely randomly.

Pair Corralation between Apollo Medical and EON SE

Assuming the 90 days horizon Apollo Medical Holdings is expected to under-perform the EON SE. But the stock apears to be less risky and, when comparing its historical volatility, Apollo Medical Holdings is 1.05 times less risky than EON SE. The stock trades about -0.04 of its potential returns per unit of risk. The EON SE is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,100  in EON SE on December 28, 2024 and sell it today you would earn a total of  200.00  from holding EON SE or generate 18.18% return on investment over 90 days.

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

Apollo Medical Holdings  vs.  EON SE

Apollo Medical Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apollo Medical Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

EON SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EON SE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, EON SE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apollo Medical and EON SE

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

The idea behind Apollo Medical Holdings and EON SE 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.