Correlation Between Fine Organic and Apollo Hospitals

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

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

Diversification Opportunities for Fine Organic and Apollo Hospitals

0.92

Correlation Coefficient

Fine Organic  Apollo Hospitals

Almost no diversification

The 3 months correlation between Fine and Apollo is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Fine Organic Industries and Apollo Hospitals Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Hospitals Ent and Fine Organic 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 Fine Organic Industries are associated (or correlated) with Apollo Hospitals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Hospitals Ent has no effect on the direction of Fine Organic i.e., Fine Organic and Apollo Hospitals go up and down completely randomly.

Pair Corralation between Fine Organic and Apollo Hospitals

Assuming the 90 days trading horizon Fine Organic Industries is expected to under-perform the Apollo Hospitals. In addition to that, Fine Organic is 1.42 times more volatile than Apollo Hospitals Enterprise. It trades about -0.07 of its total potential returns per unit of risk. Apollo Hospitals Enterprise is currently generating about -0.09 per unit of volatility. If you would invest  725,089  in Apollo Hospitals Enterprise on December 26, 2024 and sell it today you would lose (60,619) from holding Apollo Hospitals Enterprise or give up 8.36% of portfolio value over 90 days.

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

Fine Organic Industries  vs.  Apollo Hospitals Enterprise

Fine Organic Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fine Organic Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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 latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Fine Organic and Apollo Hospitals

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

The idea behind Fine Organic Industries and Apollo Hospitals Enterprise 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.