Correlation Between Stellar Capital and APN Convenience

Can any of the company-specific risk be diversified away by investing in both Stellar Capital and APN Convenience 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 Stellar Capital and APN Convenience into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Stellar Capital Partners and APN Convenience Retail, you can compare the effects of market volatilities on Stellar Capital and APN Convenience 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 Stellar Capital with a short position of APN Convenience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar Capital and APN Convenience.

Diversification Opportunities for Stellar Capital and APN Convenience

0.0

Correlation Coefficient

Stellar Capital  APN Convenience

Pay attention - limited upside

The 3 months correlation between Stellar and APN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stellar Capital Partners and APN Convenience Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APN Convenience Retail and Stellar Capital 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 Stellar Capital Partners are associated (or correlated) with APN Convenience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APN Convenience Retail has no effect on the direction of Stellar Capital i.e., Stellar Capital and APN Convenience go up and down completely randomly.

Pair Corralation between Stellar Capital and APN Convenience

If you would invest (100.00) in APN Convenience Retail on December 27, 2024 and sell it today you would earn a total of  100.00  from holding APN Convenience Retail or generate -100.0% return on investment over 90 days.

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

Stellar Capital Partners  vs.  APN Convenience Retail

Stellar Capital Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stellar Capital Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Stellar Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

APN Convenience Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days APN Convenience Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, APN Convenience is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Stellar Capital and APN Convenience

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

The idea behind Stellar Capital Partners and APN Convenience Retail 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.