Correlation Between Apex Frozen and Hindustan Zinc

Can any of the company-specific risk be diversified away by investing in both Apex Frozen and Hindustan Zinc 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 Apex Frozen and Hindustan Zinc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apex Frozen Foods and Hindustan Zinc Limited, you can compare the effects of market volatilities on Apex Frozen and Hindustan Zinc 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 Apex Frozen with a short position of Hindustan Zinc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apex Frozen and Hindustan Zinc.

Diversification Opportunities for Apex Frozen and Hindustan Zinc

0.72

Correlation Coefficient

Apex Frozen  Hindustan Zinc

Poor diversification

The 3 months correlation between Apex and Hindustan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Apex Frozen Foods and Hindustan Zinc Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hindustan Zinc and Apex Frozen 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 Apex Frozen Foods are associated (or correlated) with Hindustan Zinc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hindustan Zinc has no effect on the direction of Apex Frozen i.e., Apex Frozen and Hindustan Zinc go up and down completely randomly.

Pair Corralation between Apex Frozen and Hindustan Zinc

Assuming the 90 days trading horizon Apex Frozen Foods is expected to generate 1.49 times more return on investment than Hindustan Zinc. However, Apex Frozen is 1.49 times more volatile than Hindustan Zinc Limited. It trades about -0.07 of its potential returns per unit of risk. Hindustan Zinc Limited is currently generating about -0.17 per unit of risk. If you would invest  25,289  in Apex Frozen Foods on December 4, 2024 and sell it today you would lose (4,503) from holding Apex Frozen Foods or give up 17.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

Apex Frozen Foods  vs.  Hindustan Zinc Limited

Apex Frozen Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apex Frozen Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Hindustan Zinc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hindustan Zinc Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Apex Frozen and Hindustan Zinc

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

The idea behind Apex Frozen Foods and Hindustan Zinc Limited 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.