Correlation Between Apollo Food and IOI Bhd

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Can any of the company-specific risk be diversified away by investing in both Apollo Food and IOI Bhd 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 Food and IOI Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Food Holdings and IOI Bhd, you can compare the effects of market volatilities on Apollo Food and IOI Bhd 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 Food with a short position of IOI Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Food and IOI Bhd.

Diversification Opportunities for Apollo Food and IOI Bhd

-0.05
  Correlation Coefficient

Good diversification

The 3 months correlation between Apollo and IOI is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Food Holdings and IOI Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IOI Bhd and Apollo Food 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 Food Holdings are associated (or correlated) with IOI Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IOI Bhd has no effect on the direction of Apollo Food i.e., Apollo Food and IOI Bhd go up and down completely randomly.

Pair Corralation between Apollo Food and IOI Bhd

Assuming the 90 days trading horizon Apollo Food Holdings is expected to generate 2.02 times more return on investment than IOI Bhd. However, Apollo Food is 2.02 times more volatile than IOI Bhd. It trades about 0.1 of its potential returns per unit of risk. IOI Bhd is currently generating about 0.05 per unit of risk. If you would invest  625.00  in Apollo Food Holdings on September 27, 2024 and sell it today you would earn a total of  25.00  from holding Apollo Food Holdings or generate 4.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Apollo Food Holdings  vs.  IOI Bhd

 Performance 
       Timeline  
Apollo Food Holdings 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Food Holdings are ranked lower than 2 (%) 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.
IOI Bhd 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in IOI Bhd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, IOI Bhd is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Apollo Food and IOI Bhd Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apollo Food and IOI Bhd

The main advantage of trading using opposite Apollo Food and IOI Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Food position performs unexpectedly, IOI Bhd 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 IOI Bhd will offset losses from the drop in IOI Bhd's long position.
The idea behind Apollo Food Holdings and IOI Bhd 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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