Correlation Between Apex Frozen and Taj GVK

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

Diversification Opportunities for Apex Frozen and Taj GVK

0.44

Correlation Coefficient

Apex Frozen  Taj GVK

Very weak diversification

The 3 months correlation between Apex and Taj is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Apex Frozen Foods and Taj GVK Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taj GVK Hotels 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 Taj GVK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taj GVK Hotels has no effect on the direction of Apex Frozen i.e., Apex Frozen and Taj GVK go up and down completely randomly.

Pair Corralation between Apex Frozen and Taj GVK

Assuming the 90 days trading horizon Apex Frozen is expected to generate 8.54 times less return on investment than Taj GVK. But when comparing it to its historical volatility, Apex Frozen Foods is 1.07 times less risky than Taj GVK. It trades about 0.03 of its potential returns per unit of risk. Taj GVK Hotels is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  32,640  in Taj GVK Hotels on October 6, 2024 and sell it today you would earn a total of  11,920  from holding Taj GVK Hotels or generate 36.52% return on investment over 90 days.

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

Apex Frozen Foods  vs.  Taj GVK Hotels

Apex Frozen Foods

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Apex Frozen Foods are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Apex Frozen unveiled solid returns over the last few months and may actually be approaching a breakup point.

Taj GVK Hotels

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Taj GVK Hotels are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Taj GVK sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apex Frozen and Taj GVK

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

The idea behind Apex Frozen Foods and Taj GVK Hotels 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.