Correlation Between ZF Commercial and Apex Frozen

Can any of the company-specific risk be diversified away by investing in both ZF Commercial and Apex Frozen 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 ZF Commercial and Apex Frozen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ZF Commercial Vehicle and Apex Frozen Foods, you can compare the effects of market volatilities on ZF Commercial and Apex Frozen 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 ZF Commercial with a short position of Apex Frozen. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZF Commercial and Apex Frozen.

Diversification Opportunities for ZF Commercial and Apex Frozen

-0.26

Correlation Coefficient

ZF Commercial  Apex Frozen

Very good diversification

The 3 months correlation between ZFCVINDIA and Apex is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding ZF Commercial Vehicle and Apex Frozen Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Frozen Foods and ZF Commercial 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 ZF Commercial Vehicle are associated (or correlated) with Apex Frozen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Frozen Foods has no effect on the direction of ZF Commercial i.e., ZF Commercial and Apex Frozen go up and down completely randomly.

Pair Corralation between ZF Commercial and Apex Frozen

Assuming the 90 days trading horizon ZF Commercial Vehicle is expected to under-perform the Apex Frozen. In addition to that, ZF Commercial is 1.05 times more volatile than Apex Frozen Foods. It trades about -0.33 of its total potential returns per unit of risk. Apex Frozen Foods is currently generating about 0.08 per unit of volatility. If you would invest  23,613  in Apex Frozen Foods on September 22, 2024 and sell it today you would earn a total of  1,071  from holding Apex Frozen Foods or generate 4.54% return on investment over 90 days.

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

ZF Commercial Vehicle  vs.  Apex Frozen Foods

ZF Commercial Vehicle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZF Commercial Vehicle has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Apex Frozen Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apex Frozen Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Apex Frozen is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ZF Commercial and Apex Frozen

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

The idea behind ZF Commercial Vehicle and Apex Frozen Foods 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.