Correlation Between APT Systems and Indo Global

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

By analyzing existing cross correlation between APT Systems and Indo Global Exchange, you can compare the effects of market volatilities on APT Systems and Indo Global 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 APT Systems with a short position of Indo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of APT Systems and Indo Global.

Diversification Opportunities for APT Systems and Indo Global

0.41

Correlation Coefficient

APT Systems  Indo Global

Very weak diversification

The 3 months correlation between APT and Indo is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding APT Systems and Indo Global Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Global Exchange and APT Systems 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 APT Systems are associated (or correlated) with Indo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Global Exchange has no effect on the direction of APT Systems i.e., APT Systems and Indo Global go up and down completely randomly.

Pair Corralation between APT Systems and Indo Global

Given the investment horizon of 90 days APT Systems is expected to generate 2.11 times more return on investment than Indo Global. However, APT Systems is 2.11 times more volatile than Indo Global Exchange. It trades about 0.08 of its potential returns per unit of risk. Indo Global Exchange is currently generating about 0.0 per unit of risk. If you would invest  0.04  in APT Systems on December 26, 2024 and sell it today you would earn a total of  0.00  from holding APT Systems or generate 0.0% return on investment over 90 days.

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

APT Systems  vs.  Indo Global Exchange

APT Systems

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in APT Systems are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, APT Systems showed solid returns over the last few months and may actually be approaching a breakup point.

Indo Global Exchange

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indo Global Exchange has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Indo Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with APT Systems and Indo Global

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

The idea behind APT Systems and Indo Global Exchange 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.