Correlation Between Apollo Hospitals and Fertilizers

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

By analyzing existing cross correlation between Apollo Hospitals Enterprise and Fertilizers and Chemicals, you can compare the effects of market volatilities on Apollo Hospitals and Fertilizers 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 Apollo Hospitals with a short position of Fertilizers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Hospitals and Fertilizers.

Diversification Opportunities for Apollo Hospitals and Fertilizers

0.91

Correlation Coefficient

Apollo Hospitals  Fertilizers

Almost no diversification

The 3 months correlation between Apollo and Fertilizers is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Hospitals Enterprise and Fertilizers and Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fertilizers and Chemicals and Apollo Hospitals 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 Apollo Hospitals Enterprise are associated (or correlated) with Fertilizers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fertilizers and Chemicals has no effect on the direction of Apollo Hospitals i.e., Apollo Hospitals and Fertilizers go up and down completely randomly.

Pair Corralation between Apollo Hospitals and Fertilizers

Assuming the 90 days trading horizon Apollo Hospitals Enterprise is expected to generate 0.5 times more return on investment than Fertilizers. However, Apollo Hospitals Enterprise is 1.98 times less risky than Fertilizers. It trades about -0.29 of its potential returns per unit of risk. Fertilizers and Chemicals is currently generating about -0.26 per unit of risk. If you would invest  741,117  in Apollo Hospitals Enterprise on December 2, 2024 and sell it today you would lose (135,857) from holding Apollo Hospitals Enterprise or give up 18.33% of portfolio value over 90 days.

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

Apollo Hospitals Enterprise  vs.  Fertilizers and Chemicals

Apollo Hospitals Ent

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apollo Hospitals Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Fertilizers and Chemicals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fertilizers and Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Apollo Hospitals and Fertilizers

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

The idea behind Apollo Hospitals Enterprise and Fertilizers and Chemicals 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.