Correlation Between FOS Capital and Apiam Animal

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

By analyzing existing cross correlation between FOS Capital and Apiam Animal Health, you can compare the effects of market volatilities on FOS Capital and Apiam Animal 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 FOS Capital with a short position of Apiam Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOS Capital and Apiam Animal.

Diversification Opportunities for FOS Capital and Apiam Animal

0.16

Correlation Coefficient

FOS Capital  Apiam Animal

Average diversification

The 3 months correlation between FOS and Apiam is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding FOS Capital and Apiam Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apiam Animal Health and FOS Capital 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 FOS Capital are associated (or correlated) with Apiam Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apiam Animal Health has no effect on the direction of FOS Capital i.e., FOS Capital and Apiam Animal go up and down completely randomly.

Pair Corralation between FOS Capital and Apiam Animal

Assuming the 90 days trading horizon FOS Capital is expected to generate 27.88 times less return on investment than Apiam Animal. But when comparing it to its historical volatility, FOS Capital is 1.31 times less risky than Apiam Animal. It trades about 0.01 of its potential returns per unit of risk. Apiam Animal Health is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  48.00  in Apiam Animal Health on April 24, 2025 and sell it today you would earn a total of  11.00  from holding Apiam Animal Health or generate 22.92% return on investment over 90 days.

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

FOS Capital  vs.  Apiam Animal Health

FOS Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days FOS Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, FOS Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Apiam Animal Health

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apiam Animal Health are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Apiam Animal unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FOS Capital and Apiam Animal

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

The idea behind FOS Capital and Apiam Animal Health 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..