Correlation Between Apollo Food and Notion Vtec

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

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

Diversification Opportunities for Apollo Food and Notion Vtec

0.27

Correlation Coefficient

Apollo Food  Notion Vtec

Modest diversification

The 3 months correlation between Apollo and Notion is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Food Holdings and Notion Vtec Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Notion Vtec Bhd and Apollo Food 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 Food Holdings are associated (or correlated) with Notion Vtec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Notion Vtec Bhd has no effect on the direction of Apollo Food i.e., Apollo Food and Notion Vtec go up and down completely randomly.

Pair Corralation between Apollo Food and Notion Vtec

Assuming the 90 days trading horizon Apollo Food is expected to generate 2.31 times less return on investment than Notion Vtec. But when comparing it to its historical volatility, Apollo Food Holdings is 2.17 times less risky than Notion Vtec. It trades about 0.07 of its potential returns per unit of risk. Notion Vtec Bhd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Notion Vtec Bhd on September 23, 2024 and sell it today you would earn a total of  92.00  from holding Notion Vtec Bhd or generate 255.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.59%
Values	Daily Returns

Apollo Food Holdings  vs.  Notion Vtec Bhd

Apollo Food Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Food Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Apollo Food is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Notion Vtec Bhd

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Notion Vtec Bhd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Notion Vtec disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apollo Food and Notion Vtec

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

The idea behind Apollo Food Holdings and Notion Vtec Bhd 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.