Correlation Between Global Health and Apex Frozen

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

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

Diversification Opportunities for Global Health and Apex Frozen

0.35

Correlation Coefficient

Global Health  Apex Frozen

Weak diversification

The 3 months correlation between Global and Apex is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Global Health Limited 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 Global Health 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 Global Health Limited 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 Global Health i.e., Global Health and Apex Frozen go up and down completely randomly.

Pair Corralation between Global Health and Apex Frozen

Assuming the 90 days trading horizon Global Health Limited is expected to under-perform the Apex Frozen. But the stock apears to be less risky and, when comparing its historical volatility, Global Health Limited is 3.26 times less risky than Apex Frozen. The stock trades about -0.35 of its potential returns per unit of risk. The Apex Frozen Foods is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  25,642  in Apex Frozen Foods on October 9, 2024 and sell it today you would lose (1,167) from holding Apex Frozen Foods or give up 4.55% of portfolio value over 90 days.

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

Global Health Limited  vs.  Apex Frozen Foods

Global Health Limited

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Health Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Global Health may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Apex Frozen Foods

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apex Frozen Foods are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 Global Health and Apex Frozen

The main advantage of trading using opposite Global Health and Apex Frozen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Health 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 Global Health Limited 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 Commodity Directory module to find actively traded commodities issued by global exchanges.