Correlation Between JIO Financial and Apollo Micro

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Can any of the company-specific risk be diversified away by investing in both JIO Financial and Apollo Micro 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 JIO Financial and Apollo Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JIO Financial Services and Apollo Micro Systems, you can compare the effects of market volatilities on JIO Financial and Apollo Micro 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 JIO Financial with a short position of Apollo Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of JIO Financial and Apollo Micro.

Diversification Opportunities for JIO Financial and Apollo Micro

0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between JIO and Apollo is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding JIO Financial Services and Apollo Micro Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Micro Systems and JIO Financial 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 JIO Financial Services are associated (or correlated) with Apollo Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Micro Systems has no effect on the direction of JIO Financial i.e., JIO Financial and Apollo Micro go up and down completely randomly.

Pair Corralation between JIO Financial and Apollo Micro

Assuming the 90 days trading horizon JIO Financial is expected to generate 1.69 times less return on investment than Apollo Micro. But when comparing it to its historical volatility, JIO Financial Services is 2.46 times less risky than Apollo Micro. It trades about 0.24 of its potential returns per unit of risk. Apollo Micro Systems is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  12,042  in Apollo Micro Systems on April 20, 2025 and sell it today you would earn a total of  5,668  from holding Apollo Micro Systems or generate 47.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

JIO Financial Services  vs.  Apollo Micro Systems

 Performance 
       Timeline  
JIO Financial Services 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Over the last 90 days JIO Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak technical and fundamental indicators, JIO Financial sustained solid returns over the last few months and may actually be approaching a breakup point.
Apollo Micro Systems 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Micro Systems are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent essential indicators, Apollo Micro sustained solid returns over the last few months and may actually be approaching a breakup point.

JIO Financial and Apollo Micro Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JIO Financial and Apollo Micro

The main advantage of trading using opposite JIO Financial and Apollo Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JIO Financial position performs unexpectedly, Apollo Micro 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 Apollo Micro will offset losses from the drop in Apollo Micro's long position.
The idea behind JIO Financial Services and Apollo Micro Systems 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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