Correlation Between Api Group and Meritage

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

By analyzing existing cross correlation between Api Group Corp and Meritage, you can compare the effects of market volatilities on Api Group and Meritage 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 Api Group with a short position of Meritage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Api Group and Meritage.

Diversification Opportunities for Api Group and Meritage

0.56

Correlation Coefficient

Api Group  Meritage

Very weak diversification

The 3 months correlation between Api and Meritage is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Api Group Corp and Meritage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meritage and Api Group 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 Api Group Corp are associated (or correlated) with Meritage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meritage has no effect on the direction of Api Group i.e., Api Group and Meritage go up and down completely randomly.

Pair Corralation between Api Group and Meritage

Considering the 90-day investment horizon Api Group Corp is expected to generate 0.5 times more return on investment than Meritage. However, Api Group Corp is 2.0 times less risky than Meritage. It trades about 0.15 of its potential returns per unit of risk. Meritage is currently generating about 0.03 per unit of risk. If you would invest  3,054  in Api Group Corp on May 13, 2025 and sell it today you would earn a total of  392.00  from holding Api Group Corp or generate 12.84% return on investment over 90 days.

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

Api Group Corp  vs.  Meritage

Api Group Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Api Group Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Api Group reported solid returns over the last few months and may actually be approaching a breakup point.

Meritage

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Meritage are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Meritage is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Api Group and Meritage

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

The idea behind Api Group Corp and Meritage 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.