Correlation Between Teamlease Services and Apollo Hospitals

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

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

Diversification Opportunities for Teamlease Services and Apollo Hospitals

0.04

Correlation Coefficient

Teamlease Services  Apollo Hospitals

Significant diversification

The 3 months correlation between Teamlease and Apollo is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Teamlease Services Limited 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 Teamlease Services 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 Teamlease Services Limited 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 Teamlease Services i.e., Teamlease Services and Apollo Hospitals go up and down completely randomly.

Pair Corralation between Teamlease Services and Apollo Hospitals

Assuming the 90 days trading horizon Teamlease Services Limited is expected to under-perform the Apollo Hospitals. In addition to that, Teamlease Services is 1.14 times more volatile than Apollo Hospitals Enterprise. It trades about -0.07 of its total potential returns per unit of risk. Apollo Hospitals Enterprise is currently generating about 0.04 per unit of volatility. If you would invest  693,090  in Apollo Hospitals Enterprise on September 4, 2024 and sell it today you would earn a total of  19,565  from holding Apollo Hospitals Enterprise or generate 2.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Teamlease Services Limited  vs.  Apollo Hospitals Enterprise

Teamlease Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teamlease Services Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Apollo Hospitals Ent

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Hospitals Enterprise are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Apollo Hospitals is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Teamlease Services and Apollo Hospitals

The main advantage of trading using opposite Teamlease Services and Apollo Hospitals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teamlease Services 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 Teamlease Services Limited 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.