Correlation Between Aptech and Barbeque Nation

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

By analyzing existing cross correlation between Aptech Limited and Barbeque Nation Hospitality, you can compare the effects of market volatilities on Aptech and Barbeque Nation 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 Aptech with a short position of Barbeque Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptech and Barbeque Nation.

Diversification Opportunities for Aptech and Barbeque Nation

0.78

Correlation Coefficient

Aptech  Barbeque Nation

Poor diversification

The 3 months correlation between Aptech and Barbeque is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aptech Limited and Barbeque Nation Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barbeque Nation Hosp and Aptech 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 Aptech Limited are associated (or correlated) with Barbeque Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barbeque Nation Hosp has no effect on the direction of Aptech i.e., Aptech and Barbeque Nation go up and down completely randomly.

Pair Corralation between Aptech and Barbeque Nation

Assuming the 90 days trading horizon Aptech Limited is expected to generate 1.35 times more return on investment than Barbeque Nation. However, Aptech is 1.35 times more volatile than Barbeque Nation Hospitality. It trades about 0.16 of its potential returns per unit of risk. Barbeque Nation Hospitality is currently generating about 0.13 per unit of risk. If you would invest  10,851  in Aptech Limited on April 6, 2025 and sell it today you would earn a total of  4,498  from holding Aptech Limited or generate 41.45% return on investment over 90 days.

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

Aptech Limited  vs.  Barbeque Nation Hospitality

Aptech Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aptech Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, Aptech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Barbeque Nation Hosp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Barbeque Nation Hospitality are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Barbeque Nation unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aptech and Barbeque Nation

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

The idea behind Aptech Limited and Barbeque Nation Hospitality 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.