Correlation Between APL Apollo and HEG
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By analyzing existing cross correlation between APL Apollo Tubes and HEG Limited, you can compare the effects of market volatilities on APL Apollo and HEG 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 APL Apollo with a short position of HEG. Check out your portfolio center. Please also check ongoing floating volatility patterns of APL Apollo and HEG.
Diversification Opportunities for APL Apollo and HEG
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between APL and HEG is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding APL Apollo Tubes and HEG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEG Limited and APL Apollo 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 APL Apollo Tubes are associated (or correlated) with HEG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEG Limited has no effect on the direction of APL Apollo i.e., APL Apollo and HEG go up and down completely randomly.
Pair Corralation between APL Apollo and HEG
Assuming the 90 days trading horizon APL Apollo is expected to generate 4.73 times less return on investment than HEG. But when comparing it to its historical volatility, APL Apollo Tubes is 3.77 times less risky than HEG. It trades about 0.19 of its potential returns per unit of risk. HEG Limited is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 41,515 in HEG Limited on September 25, 2024 and sell it today you would earn a total of 11,580 from holding HEG Limited or generate 27.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
APL Apollo Tubes vs. HEG Limited
Performance |
Timeline |
APL Apollo Tubes |
HEG Limited |
APL Apollo and HEG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with APL Apollo and HEG
The main advantage of trading using opposite APL Apollo and HEG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APL Apollo position performs unexpectedly, HEG 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 HEG will offset losses from the drop in HEG's long position.APL Apollo vs. NMDC Limited | APL Apollo vs. Steel Authority of | APL Apollo vs. Embassy Office Parks | APL Apollo vs. Gujarat Narmada Valley |
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Check out your portfolio center.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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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