Correlation Between Apex Frozen and FSN E

Can any of the company-specific risk be diversified away by investing in both Apex Frozen and FSN E 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 FSN E 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 FSN E Commerce Ventures, you can compare the effects of market volatilities on Apex Frozen and FSN E 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 FSN E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apex Frozen and FSN E.

Diversification Opportunities for Apex Frozen and FSN E

0.21

Correlation Coefficient

Apex Frozen  FSN E

Modest diversification

The 3 months correlation between Apex and FSN is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Apex Frozen Foods and FSN E Commerce Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSN E Commerce 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 FSN E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSN E Commerce has no effect on the direction of Apex Frozen i.e., Apex Frozen and FSN E go up and down completely randomly.

Pair Corralation between Apex Frozen and FSN E

Assuming the 90 days trading horizon Apex Frozen Foods is expected to generate 1.95 times more return on investment than FSN E. However, Apex Frozen is 1.95 times more volatile than FSN E Commerce Ventures. It trades about 0.02 of its potential returns per unit of risk. FSN E Commerce Ventures is currently generating about -0.05 per unit of risk. If you would invest  23,863  in Apex Frozen Foods on October 25, 2024 and sell it today you would earn a total of  257.00  from holding Apex Frozen Foods or generate 1.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Apex Frozen Foods  vs.  FSN E Commerce Ventures

Apex Frozen Foods

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apex Frozen Foods are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Apex Frozen is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

FSN E Commerce

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FSN E Commerce Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking signals, FSN E is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Apex Frozen and FSN E

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

The idea behind Apex Frozen Foods and FSN E Commerce Ventures 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.