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

0.73

Correlation Coefficient

APG Securities  DIC Holdings

Poor diversification

The 3 months correlation between APG and DIC is 0.73. 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 Joint is expected to generate 1.25 times more return on investment than DIC Holdings. However, APG Securities is 1.25 times more volatile than DIC Holdings Construction. It trades about 0.22 of its potential returns per unit of risk. DIC Holdings Construction is currently generating about 0.07 per unit of risk. If you would invest  719,000  in APG Securities Joint on December 27, 2024 and sell it today you would earn a total of  336,000  from holding APG Securities Joint or generate 46.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.31%
Values	Daily Returns

APG Securities Joint  vs.  DIC Holdings Construction

APG Securities Joint

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in APG Securities Joint are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, APG Securities displayed solid returns over the last few months and may actually be approaching a breakup point.

DIC Holdings Construction

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DIC Holdings Construction are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, DIC Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.