Correlation Between Agro Phos and Apollo Hospitals

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

By analyzing existing cross correlation between Agro Phos India and Apollo Hospitals Enterprise, you can compare the effects of market volatilities on Agro Phos and Apollo Hospitals 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 Agro Phos with a short position of Apollo Hospitals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agro Phos and Apollo Hospitals.

Diversification Opportunities for Agro Phos and Apollo Hospitals

-0.11

Correlation Coefficient

Agro Phos  Apollo Hospitals

Good diversification

The 3 months correlation between Agro and Apollo is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Agro Phos India and Apollo Hospitals Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Hospitals Ent and Agro Phos 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 Agro Phos India are associated (or correlated) with Apollo Hospitals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Hospitals Ent has no effect on the direction of Agro Phos i.e., Agro Phos and Apollo Hospitals go up and down completely randomly.

Pair Corralation between Agro Phos and Apollo Hospitals

Assuming the 90 days trading horizon Agro Phos is expected to generate 2.47 times less return on investment than Apollo Hospitals. In addition to that, Agro Phos is 2.45 times more volatile than Apollo Hospitals Enterprise. It trades about 0.01 of its total potential returns per unit of risk. Apollo Hospitals Enterprise is currently generating about 0.09 per unit of volatility. If you would invest  431,556  in Apollo Hospitals Enterprise on October 9, 2024 and sell it today you would earn a total of  311,359  from holding Apollo Hospitals Enterprise or generate 72.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.59%
Values	Daily Returns

Agro Phos India  vs.  Apollo Hospitals Enterprise

Agro Phos India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agro Phos India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Apollo Hospitals Ent

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Hospitals Enterprise are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Apollo Hospitals may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Agro Phos and Apollo Hospitals

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

The idea behind Agro Phos India and Apollo Hospitals Enterprise 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 Transaction History module to view history of all your transactions and understand their impact on performance.