Correlation Between FGV Holdings and Apollo Food

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

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

Diversification Opportunities for FGV Holdings and Apollo Food

0.06

Correlation Coefficient

FGV Holdings  Apollo Food

Significant diversification

The 3 months correlation between FGV and Apollo is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding FGV Holdings 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 FGV Holdings 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 FGV Holdings 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 FGV Holdings i.e., FGV Holdings and Apollo Food go up and down completely randomly.

Pair Corralation between FGV Holdings and Apollo Food

Assuming the 90 days trading horizon FGV Holdings is expected to generate 1.95 times less return on investment than Apollo Food. In addition to that, FGV Holdings is 1.46 times more volatile than Apollo Food Holdings. It trades about 0.02 of its total potential returns per unit of risk. Apollo Food Holdings is currently generating about 0.05 per unit of volatility. If you would invest  637.00  in Apollo Food Holdings on December 30, 2024 and sell it today you would earn a total of  17.00  from holding Apollo Food Holdings or generate 2.67% return on investment over 90 days.

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

FGV Holdings Bhd  vs.  Apollo Food Holdings

FGV Holdings Bhd

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FGV Holdings Bhd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, FGV Holdings is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Apollo Food Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Food Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Apollo Food is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with FGV Holdings and Apollo Food

The main advantage of trading using opposite FGV Holdings and Apollo Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FGV Holdings 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 FGV Holdings 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.