Correlation Between Praxis Home and Apollo Hospitals

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

By analyzing existing cross correlation between Praxis Home Retail and Apollo Hospitals Enterprise, you can compare the effects of market volatilities on Praxis Home and Apollo Hospitals 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 Praxis Home with a short position of Apollo Hospitals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Home and Apollo Hospitals.

Diversification Opportunities for Praxis Home and Apollo Hospitals

0.41

Correlation Coefficient

Praxis Home  Apollo Hospitals

Very weak diversification

The 3 months correlation between Praxis and Apollo is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Home Retail and Apollo Hospitals Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Hospitals Ent and Praxis Home 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 Praxis Home Retail are associated (or correlated) with Apollo Hospitals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Hospitals Ent has no effect on the direction of Praxis Home i.e., Praxis Home and Apollo Hospitals go up and down completely randomly.

Pair Corralation between Praxis Home and Apollo Hospitals

Assuming the 90 days trading horizon Praxis Home Retail is expected to under-perform the Apollo Hospitals. In addition to that, Praxis Home is 2.37 times more volatile than Apollo Hospitals Enterprise. It trades about -0.1 of its total potential returns per unit of risk. Apollo Hospitals Enterprise is currently generating about 0.02 per unit of volatility. If you would invest  742,625  in Apollo Hospitals Enterprise on April 7, 2025 and sell it today you would earn a total of  12,725  from holding Apollo Hospitals Enterprise or generate 1.71% return on investment over 90 days.

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

Praxis Home Retail  vs.  Apollo Hospitals Enterprise

Praxis Home Retail

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Praxis Home Retail are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Praxis Home sustained solid returns over the last few months and may actually be approaching a breakup point.

Apollo Hospitals Ent

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Hospitals Enterprise are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Apollo Hospitals demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Praxis Home and Apollo Hospitals

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

The idea behind Praxis Home Retail and Apollo Hospitals Enterprise 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.