Correlation Between Buff Technologies and Apollo Power

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

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

Diversification Opportunities for Buff Technologies and Apollo Power

-0.45

Correlation Coefficient

Buff Technologies  Apollo Power

Very good diversification

The 3 months correlation between Buff and Apollo is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Buff Technologies and Apollo Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Power and Buff Technologies 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 Buff Technologies are associated (or correlated) with Apollo Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Power has no effect on the direction of Buff Technologies i.e., Buff Technologies and Apollo Power go up and down completely randomly.

Pair Corralation between Buff Technologies and Apollo Power

Assuming the 90 days trading horizon Buff Technologies is expected to under-perform the Apollo Power. But the stock apears to be less risky and, when comparing its historical volatility, Buff Technologies is 1.66 times less risky than Apollo Power. The stock trades about -0.03 of its potential returns per unit of risk. The Apollo Power is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  27,830  in Apollo Power on May 21, 2025 and sell it today you would earn a total of  17,050  from holding Apollo Power or generate 61.26% return on investment over 90 days.

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

Buff Technologies  vs.  Apollo Power

Buff Technologies

Risk-Adjusted Performance

Weakest

Over the last 90 days Buff Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Buff Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Apollo Power

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Power are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Apollo Power sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Buff Technologies and Apollo Power

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

The idea behind Buff Technologies and Apollo Power 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.