Correlation Between APG Securities and Foreign Trade

Can any of the company-specific risk be diversified away by investing in both APG Securities and Foreign Trade 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 Foreign Trade 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 Foreign Trade Development, you can compare the effects of market volatilities on APG Securities and Foreign Trade 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 Foreign Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of APG Securities and Foreign Trade.

Diversification Opportunities for APG Securities and Foreign Trade

-0.64

Correlation Coefficient

APG Securities  Foreign Trade

Excellent diversification

The 3 months correlation between APG and Foreign is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding APG Securities Joint and Foreign Trade Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Trade Development 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 Foreign Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Trade Development has no effect on the direction of APG Securities i.e., APG Securities and Foreign Trade go up and down completely randomly.

Pair Corralation between APG Securities and Foreign Trade

Assuming the 90 days trading horizon APG Securities Joint is expected to generate 0.59 times more return on investment than Foreign Trade. However, APG Securities Joint is 1.7 times less risky than Foreign Trade. It trades about 0.03 of its potential returns per unit of risk. Foreign Trade Development is currently generating about 0.01 per unit of risk. If you would invest  590,000  in APG Securities Joint on September 29, 2024 and sell it today you would earn a total of  129,000  from holding APG Securities Joint or generate 21.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	61.05%
Values	Daily Returns

APG Securities Joint  vs.  Foreign Trade Development

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.

Foreign Trade Development

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Foreign Trade Development are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Foreign Trade displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with APG Securities and Foreign Trade

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

The idea behind APG Securities Joint and Foreign Trade Development 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.