Correlation Between Apollo Sindoori and Tata Investment

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

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

Diversification Opportunities for Apollo Sindoori and Tata Investment

-0.18

Correlation Coefficient

Apollo Sindoori  Tata Investment

Good diversification

The 3 months correlation between Apollo and Tata is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Sindoori Hotels and Tata Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tata Investment and Apollo Sindoori 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 Sindoori Hotels are associated (or correlated) with Tata Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tata Investment has no effect on the direction of Apollo Sindoori i.e., Apollo Sindoori and Tata Investment go up and down completely randomly.

Pair Corralation between Apollo Sindoori and Tata Investment

Assuming the 90 days trading horizon Apollo Sindoori Hotels is expected to generate 1.94 times more return on investment than Tata Investment. However, Apollo Sindoori is 1.94 times more volatile than Tata Investment. It trades about 0.03 of its potential returns per unit of risk. Tata Investment is currently generating about -0.05 per unit of risk. If you would invest  178,673  in Apollo Sindoori Hotels on September 3, 2024 and sell it today you would earn a total of  7,087  from holding Apollo Sindoori Hotels or generate 3.97% return on investment over 90 days.

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

Apollo Sindoori Hotels  vs.  Tata Investment

Apollo Sindoori Hotels

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Sindoori Hotels are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical indicators, Apollo Sindoori may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tata Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tata Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Tata Investment is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Apollo Sindoori and Tata Investment

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

The idea behind Apollo Sindoori Hotels and Tata Investment 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.