Correlation Between Apollo Medical and DICKS Sporting

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Can any of the company-specific risk be diversified away by investing in both Apollo Medical and DICKS Sporting 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 Apollo Medical and DICKS Sporting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Medical Holdings and DICKS Sporting Goods, you can compare the effects of market volatilities on Apollo Medical and DICKS Sporting 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 Apollo Medical with a short position of DICKS Sporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Medical and DICKS Sporting.

Diversification Opportunities for Apollo Medical and DICKS Sporting

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Apollo and DICKS is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical Holdings and DICKS Sporting Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKS Sporting Goods and Apollo Medical 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 Apollo Medical Holdings are associated (or correlated) with DICKS Sporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKS Sporting Goods has no effect on the direction of Apollo Medical i.e., Apollo Medical and DICKS Sporting go up and down completely randomly.

Pair Corralation between Apollo Medical and DICKS Sporting

Assuming the 90 days horizon Apollo Medical Holdings is expected to under-perform the DICKS Sporting. But the stock apears to be less risky and, when comparing its historical volatility, Apollo Medical Holdings is 1.57 times less risky than DICKS Sporting. The stock trades about -0.6 of its potential returns per unit of risk. The DICKS Sporting Goods is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  20,168  in DICKS Sporting Goods on September 25, 2024 and sell it today you would earn a total of  542.00  from holding DICKS Sporting Goods or generate 2.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Apollo Medical Holdings  vs.  DICKS Sporting Goods

 Performance 
       Timeline  
Apollo Medical Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Apollo Medical Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
DICKS Sporting Goods 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in DICKS Sporting Goods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DICKS Sporting may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Apollo Medical and DICKS Sporting Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apollo Medical and DICKS Sporting

The main advantage of trading using opposite Apollo Medical and DICKS Sporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Medical position performs unexpectedly, DICKS Sporting 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 DICKS Sporting will offset losses from the drop in DICKS Sporting's long position.
The idea behind Apollo Medical Holdings and DICKS Sporting Goods 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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