Correlation Between Sonic Interfreight and AP Public

Can any of the company-specific risk be diversified away by investing in both Sonic Interfreight and AP Public 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 Sonic Interfreight and AP Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sonic Interfreight Public and AP Public, you can compare the effects of market volatilities on Sonic Interfreight and AP Public 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 Sonic Interfreight with a short position of AP Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonic Interfreight and AP Public.

Diversification Opportunities for Sonic Interfreight and AP Public

-0.35

Correlation Coefficient

Sonic Interfreight  AP Public

Very good diversification

The 3 months correlation between Sonic and AP Public is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Interfreight Public and AP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Public and Sonic Interfreight 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 Sonic Interfreight Public are associated (or correlated) with AP Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Public has no effect on the direction of Sonic Interfreight i.e., Sonic Interfreight and AP Public go up and down completely randomly.

Pair Corralation between Sonic Interfreight and AP Public

Assuming the 90 days trading horizon Sonic Interfreight Public is expected to under-perform the AP Public. In addition to that, Sonic Interfreight is 1.34 times more volatile than AP Public. It trades about -0.03 of its total potential returns per unit of risk. AP Public is currently generating about -0.02 per unit of volatility. If you would invest  1,011  in AP Public on October 5, 2024 and sell it today you would lose (181.00) from holding AP Public or give up 17.9% of portfolio value over 90 days.

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

Sonic Interfreight Public  vs.  AP Public

Sonic Interfreight Public

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sonic Interfreight Public are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Sonic Interfreight may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AP Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AP Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Sonic Interfreight and AP Public

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

The idea behind Sonic Interfreight Public and AP Public 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.