Correlation Between Western Copper and Apollo Medical

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

By analyzing existing cross correlation between Western Copper and and Apollo Medical Holdings, you can compare the effects of market volatilities on Western Copper and Apollo Medical 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 Western Copper with a short position of Apollo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Apollo Medical.

Diversification Opportunities for Western Copper and Apollo Medical

-0.08

Correlation Coefficient

Western Copper  Apollo Medical

Good diversification

The 3 months correlation between Western and Apollo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Apollo Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Medical Holdings and Western Copper 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 Western Copper and are associated (or correlated) with Apollo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Medical Holdings has no effect on the direction of Western Copper i.e., Western Copper and Apollo Medical go up and down completely randomly.

Pair Corralation between Western Copper and Apollo Medical

Assuming the 90 days trading horizon Western Copper and is expected to under-perform the Apollo Medical. In addition to that, Western Copper is 1.6 times more volatile than Apollo Medical Holdings. It trades about -0.19 of its total potential returns per unit of risk. Apollo Medical Holdings is currently generating about -0.18 per unit of volatility. If you would invest  3,920  in Apollo Medical Holdings on September 15, 2024 and sell it today you would lose (300.00) from holding Apollo Medical Holdings or give up 7.65% of portfolio value over 90 days.

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

Western Copper and  vs.  Apollo Medical Holdings

Western Copper

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Western Copper and are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Western Copper is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Apollo Medical Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Medical Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Apollo Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Western Copper and Apollo Medical

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

The idea behind Western Copper and and Apollo Medical Holdings 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.