Correlation Between Apex Healthcare and Dufu Tech

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

By analyzing existing cross correlation between Apex Healthcare Bhd and Dufu Tech Corp, you can compare the effects of market volatilities on Apex Healthcare and Dufu Tech 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 Apex Healthcare with a short position of Dufu Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apex Healthcare and Dufu Tech.

Diversification Opportunities for Apex Healthcare and Dufu Tech

0.15

Correlation Coefficient

Apex Healthcare  Dufu Tech

Average diversification

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

Pair Corralation between Apex Healthcare and Dufu Tech

Assuming the 90 days trading horizon Apex Healthcare Bhd is expected to under-perform the Dufu Tech. But the stock apears to be less risky and, when comparing its historical volatility, Apex Healthcare Bhd is 1.56 times less risky than Dufu Tech. The stock trades about -0.08 of its potential returns per unit of risk. The Dufu Tech Corp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  171.00  in Dufu Tech Corp on September 14, 2024 and sell it today you would earn a total of  18.00  from holding Dufu Tech Corp or generate 10.53% return on investment over 90 days.

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

Apex Healthcare Bhd  vs.  Dufu Tech Corp

Apex Healthcare Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apex Healthcare Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Dufu Tech Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dufu Tech Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Dufu Tech is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Apex Healthcare and Dufu Tech

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

The idea behind Apex Healthcare Bhd and Dufu Tech Corp 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.