Correlation Between APG Securities and DIC Holdings

Can any of the company-specific risk be diversified away by investing in both APG Securities and DIC Holdings 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 APG Securities and DIC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between APG Securities Joint and DIC Holdings Construction, you can compare the effects of market volatilities on APG Securities and DIC Holdings 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 APG Securities with a short position of DIC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of APG Securities and DIC Holdings.

Diversification Opportunities for APG Securities and DIC Holdings

0.47

Correlation Coefficient

APG Securities  DIC Holdings

Very weak diversification

The 3 months correlation between APG and DIC is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding APG Securities Joint and DIC Holdings Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIC Holdings Construction and APG Securities 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 APG Securities Joint are associated (or correlated) with DIC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIC Holdings Construction has no effect on the direction of APG Securities i.e., APG Securities and DIC Holdings go up and down completely randomly.

Pair Corralation between APG Securities and DIC Holdings

Assuming the 90 days trading horizon APG Securities is expected to generate 2.11 times less return on investment than DIC Holdings. But when comparing it to its historical volatility, APG Securities Joint is 1.08 times less risky than DIC Holdings. It trades about 0.04 of its potential returns per unit of risk. DIC Holdings Construction is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  541,319  in DIC Holdings Construction on December 2, 2024 and sell it today you would earn a total of  708,681  from holding DIC Holdings Construction or generate 130.92% return on investment over 90 days.

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

APG Securities Joint  vs.  DIC Holdings Construction

APG Securities Joint

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in APG Securities Joint are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, APG Securities is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

DIC Holdings Construction

Risk-Adjusted Performance

Very Weak

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

Pair Trading with APG Securities and DIC Holdings

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

The idea behind APG Securities Joint and DIC Holdings Construction 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.