Correlation Between Nahar Industrial and Apollo Hospitals

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

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

Diversification Opportunities for Nahar Industrial and Apollo Hospitals

0.9

Correlation Coefficient

Nahar Industrial  Apollo Hospitals

Almost no diversification

The 3 months correlation between Nahar and Apollo is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Nahar Industrial Enterprises 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 Nahar Industrial 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 Nahar Industrial Enterprises 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 Nahar Industrial i.e., Nahar Industrial and Apollo Hospitals go up and down completely randomly.

Pair Corralation between Nahar Industrial and Apollo Hospitals

Assuming the 90 days trading horizon Nahar Industrial Enterprises is expected to under-perform the Apollo Hospitals. In addition to that, Nahar Industrial is 1.7 times more volatile than Apollo Hospitals Enterprise. It trades about -0.24 of its total potential returns per unit of risk. Apollo Hospitals Enterprise is currently generating about -0.12 per unit of volatility. If you would invest  730,392  in Apollo Hospitals Enterprise on December 28, 2024 and sell it today you would lose (81,187) from holding Apollo Hospitals Enterprise or give up 11.12% of portfolio value over 90 days.

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

Nahar Industrial Enterprises  vs.  Apollo Hospitals Enterprise

Nahar Industrial Ent

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nahar Industrial Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 weak 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 Nahar Industrial and Apollo Hospitals

The main advantage of trading using opposite Nahar Industrial and Apollo Hospitals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nahar Industrial 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 Nahar Industrial Enterprises 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.