Correlation Between APG Securities and Travel Investment

Can any of the company-specific risk be diversified away by investing in both APG Securities and Travel Investment 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 APG Securities and Travel Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between APG Securities Joint and Travel Investment and, you can compare the effects of market volatilities on APG Securities and Travel Investment 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 APG Securities with a short position of Travel Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of APG Securities and Travel Investment.

Diversification Opportunities for APG Securities and Travel Investment

0.63

Correlation Coefficient

APG Securities  Travel Investment

Poor diversification

The 3 months correlation between APG and Travel is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding APG Securities Joint and Travel Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travel Investment and APG Securities 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 APG Securities Joint are associated (or correlated) with Travel Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travel Investment has no effect on the direction of APG Securities i.e., APG Securities and Travel Investment go up and down completely randomly.

Pair Corralation between APG Securities and Travel Investment

Assuming the 90 days trading horizon APG Securities Joint is expected to under-perform the Travel Investment. But the stock apears to be less risky and, when comparing its historical volatility, APG Securities Joint is 1.14 times less risky than Travel Investment. The stock trades about -0.14 of its potential returns per unit of risk. The Travel Investment and is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  780,000  in Travel Investment and on September 23, 2024 and sell it today you would lose (33,000) from holding Travel Investment and or give up 4.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	65.15%
Values	Daily Returns

APG Securities Joint  vs.  Travel Investment and

APG Securities Joint

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days APG Securities Joint has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Travel Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Travel Investment and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Travel Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with APG Securities and Travel Investment

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

The idea behind APG Securities Joint and Travel Investment and 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.