Correlation Between Shemaroo Entertainment and APL Apollo

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

By analyzing existing cross correlation between Shemaroo Entertainment Limited and APL Apollo Tubes, you can compare the effects of market volatilities on Shemaroo Entertainment and APL Apollo 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 Shemaroo Entertainment with a short position of APL Apollo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shemaroo Entertainment and APL Apollo.

Diversification Opportunities for Shemaroo Entertainment and APL Apollo

0.48

Correlation Coefficient

Shemaroo Entertainment  APL Apollo

Very weak diversification

The 3 months correlation between Shemaroo and APL is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Shemaroo Entertainment Limited and APL Apollo Tubes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APL Apollo Tubes and Shemaroo Entertainment 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 Shemaroo Entertainment Limited are associated (or correlated) with APL Apollo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APL Apollo Tubes has no effect on the direction of Shemaroo Entertainment i.e., Shemaroo Entertainment and APL Apollo go up and down completely randomly.

Pair Corralation between Shemaroo Entertainment and APL Apollo

Assuming the 90 days trading horizon Shemaroo Entertainment Limited is expected to under-perform the APL Apollo. In addition to that, Shemaroo Entertainment is 1.6 times more volatile than APL Apollo Tubes. It trades about -0.19 of its total potential returns per unit of risk. APL Apollo Tubes is currently generating about 0.02 per unit of volatility. If you would invest  152,185  in APL Apollo Tubes on December 28, 2024 and sell it today you would earn a total of  925.00  from holding APL Apollo Tubes or generate 0.61% return on investment over 90 days.

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

Shemaroo Entertainment Limited  vs.  APL Apollo Tubes

Shemaroo Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shemaroo Entertainment Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic 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.

APL Apollo Tubes

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in APL Apollo Tubes are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, APL Apollo is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Shemaroo Entertainment and APL Apollo

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

The idea behind Shemaroo Entertainment Limited and APL Apollo Tubes 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.