Correlation Between Datasonic Group and Apollo Food

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

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

Diversification Opportunities for Datasonic Group and Apollo Food

-0.26

Correlation Coefficient

Datasonic Group  Apollo Food

Very good diversification

The 3 months correlation between Datasonic and Apollo is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Datasonic Group Bhd and Apollo Food Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Food Holdings and Datasonic Group 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 Datasonic Group Bhd are associated (or correlated) with Apollo Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Food Holdings has no effect on the direction of Datasonic Group i.e., Datasonic Group and Apollo Food go up and down completely randomly.

Pair Corralation between Datasonic Group and Apollo Food

Assuming the 90 days trading horizon Datasonic Group Bhd is expected to under-perform the Apollo Food. In addition to that, Datasonic Group is 2.13 times more volatile than Apollo Food Holdings. It trades about -0.18 of its total potential returns per unit of risk. Apollo Food Holdings is currently generating about 0.11 per unit of volatility. If you would invest  613.00  in Apollo Food Holdings on November 29, 2024 and sell it today you would earn a total of  58.00  from holding Apollo Food Holdings or generate 9.46% return on investment over 90 days.

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

Datasonic Group Bhd  vs.  Apollo Food Holdings

Datasonic Group Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Datasonic Group Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Apollo Food Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Food Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Apollo Food may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Datasonic Group and Apollo Food

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

The idea behind Datasonic Group Bhd and Apollo Food 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.