Correlation Between FIT INVEST and APG Securities

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

By analyzing existing cross correlation between FIT INVEST JSC and APG Securities Joint, you can compare the effects of market volatilities on FIT INVEST and APG Securities 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 FIT INVEST with a short position of APG Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and APG Securities.

Diversification Opportunities for FIT INVEST and APG Securities

0.55

Correlation Coefficient

FIT INVEST  APG Securities

Very weak diversification

The 3 months correlation between FIT and APG is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and APG Securities Joint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APG Securities Joint and FIT INVEST 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 FIT INVEST JSC are associated (or correlated) with APG Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APG Securities Joint has no effect on the direction of FIT INVEST i.e., FIT INVEST and APG Securities go up and down completely randomly.

Pair Corralation between FIT INVEST and APG Securities

Assuming the 90 days trading horizon FIT INVEST is expected to generate 13.48 times less return on investment than APG Securities. But when comparing it to its historical volatility, FIT INVEST JSC is 3.62 times less risky than APG Securities. It trades about 0.07 of its potential returns per unit of risk. APG Securities Joint is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  679,000  in APG Securities Joint on December 28, 2024 and sell it today you would earn a total of  376,000  from holding APG Securities Joint or generate 55.38% return on investment over 90 days.

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

FIT INVEST JSC  vs.  APG Securities Joint

FIT INVEST JSC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FIT INVEST JSC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, FIT INVEST is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

APG Securities Joint

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in APG Securities Joint are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, APG Securities displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FIT INVEST and APG Securities

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

The idea behind FIT INVEST JSC and APG Securities Joint 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.