Correlation Between Apex Frozen and Cyber Media

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

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

Diversification Opportunities for Apex Frozen and Cyber Media

0.24

Correlation Coefficient

Apex Frozen  Cyber Media

Modest diversification

The 3 months correlation between Apex and Cyber is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Apex Frozen Foods and Cyber Media Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyber Media Research and Apex Frozen 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 Frozen Foods are associated (or correlated) with Cyber Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyber Media Research has no effect on the direction of Apex Frozen i.e., Apex Frozen and Cyber Media go up and down completely randomly.

Pair Corralation between Apex Frozen and Cyber Media

Assuming the 90 days trading horizon Apex Frozen Foods is expected to generate 0.79 times more return on investment than Cyber Media. However, Apex Frozen Foods is 1.27 times less risky than Cyber Media. It trades about 0.03 of its potential returns per unit of risk. Cyber Media Research is currently generating about -0.06 per unit of risk. If you would invest  22,204  in Apex Frozen Foods on September 29, 2024 and sell it today you would earn a total of  1,806  from holding Apex Frozen Foods or generate 8.13% return on investment over 90 days.

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

Apex Frozen Foods  vs.  Cyber Media Research

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Cyber Media Research

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cyber Media Research are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Cyber Media displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apex Frozen and Cyber Media

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

The idea behind Apex Frozen Foods and Cyber Media Research 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.