Correlation Between Industrial Investment and Apex Frozen

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

By analyzing existing cross correlation between Industrial Investment Trust and Apex Frozen Foods, you can compare the effects of market volatilities on Industrial Investment and Apex Frozen 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 Industrial Investment with a short position of Apex Frozen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Investment and Apex Frozen.

Diversification Opportunities for Industrial Investment and Apex Frozen

0.05

Correlation Coefficient

Industrial Investment  Apex Frozen

Significant diversification

The 3 months correlation between Industrial and Apex is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Investment Trust and Apex Frozen Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Frozen Foods and Industrial Investment 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 Industrial Investment Trust are associated (or correlated) with Apex Frozen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Frozen Foods has no effect on the direction of Industrial Investment i.e., Industrial Investment and Apex Frozen go up and down completely randomly.

Pair Corralation between Industrial Investment and Apex Frozen

Assuming the 90 days trading horizon Industrial Investment Trust is expected to under-perform the Apex Frozen. But the stock apears to be less risky and, when comparing its historical volatility, Industrial Investment Trust is 1.09 times less risky than Apex Frozen. The stock trades about -0.11 of its potential returns per unit of risk. The Apex Frozen Foods is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  23,914  in Apex Frozen Foods on September 21, 2024 and sell it today you would earn a total of  770.00  from holding Apex Frozen Foods or generate 3.22% return on investment over 90 days.

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

Industrial Investment Trust  vs.  Apex Frozen Foods

Industrial Investment

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial Investment Trust are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Industrial Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Apex Frozen Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apex Frozen Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Apex Frozen is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Industrial Investment and Apex Frozen

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

The idea behind Industrial Investment Trust and Apex Frozen Foods 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.