Correlation Between Api Group and Comfort Systems

Can any of the company-specific risk be diversified away by investing in both Api Group and Comfort Systems 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 Api Group and Comfort Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Api Group Corp and Comfort Systems USA, you can compare the effects of market volatilities on Api Group and Comfort Systems 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 Api Group with a short position of Comfort Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Api Group and Comfort Systems.

Diversification Opportunities for Api Group and Comfort Systems

-0.05

Correlation Coefficient

Api Group  Comfort Systems

Good diversification

The 3 months correlation between Api and Comfort is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Api Group Corp and Comfort Systems USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comfort Systems USA and Api Group 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 Api Group Corp are associated (or correlated) with Comfort Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comfort Systems USA has no effect on the direction of Api Group i.e., Api Group and Comfort Systems go up and down completely randomly.

Pair Corralation between Api Group and Comfort Systems

Considering the 90-day investment horizon Api Group Corp is expected to generate 0.41 times more return on investment than Comfort Systems. However, Api Group Corp is 2.45 times less risky than Comfort Systems. It trades about 0.05 of its potential returns per unit of risk. Comfort Systems USA is currently generating about -0.05 per unit of risk. If you would invest  3,600  in Api Group Corp on December 27, 2024 and sell it today you would earn a total of  197.00  from holding Api Group Corp or generate 5.47% return on investment over 90 days.

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

Api Group Corp  vs.  Comfort Systems USA

Api Group Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Api Group Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Api Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Comfort Systems USA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Comfort Systems USA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Api Group and Comfort Systems

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

The idea behind Api Group Corp and Comfort Systems USA 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.