Correlation Between Gujarat Lease and Apex Frozen

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

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

Diversification Opportunities for Gujarat Lease and Apex Frozen

0.27

Correlation Coefficient

Gujarat Lease  Apex Frozen

Modest diversification

The 3 months correlation between Gujarat and Apex is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Gujarat Lease Financing and Apex Frozen Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Frozen Foods and Gujarat Lease 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 Gujarat Lease Financing are associated (or correlated) with Apex Frozen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Frozen Foods has no effect on the direction of Gujarat Lease i.e., Gujarat Lease and Apex Frozen go up and down completely randomly.

Pair Corralation between Gujarat Lease and Apex Frozen

Assuming the 90 days trading horizon Gujarat Lease Financing is expected to generate 0.88 times more return on investment than Apex Frozen. However, Gujarat Lease Financing is 1.13 times less risky than Apex Frozen. It trades about 0.08 of its potential returns per unit of risk. Apex Frozen Foods is currently generating about 0.03 per unit of risk. If you would invest  735.00  in Gujarat Lease Financing on September 15, 2024 and sell it today you would earn a total of  84.00  from holding Gujarat Lease Financing or generate 11.43% return on investment over 90 days.

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

Gujarat Lease Financing  vs.  Apex Frozen Foods

Gujarat Lease Financing

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gujarat Lease Financing are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Gujarat Lease unveiled solid returns over the last few months and may actually be approaching a breakup point.

Apex Frozen Foods

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apex Frozen Foods are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Apex Frozen is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gujarat Lease and Apex Frozen

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

The idea behind Gujarat Lease Financing and Apex Frozen Foods 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.