Correlation Between Ares Management and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both Ares Management and Apollo Investment 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 Ares Management and Apollo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Management Corp and Apollo Investment Corp, you can compare the effects of market volatilities on Ares Management and Apollo Investment 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 Ares Management with a short position of Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Apollo Investment.
Diversification Opportunities for Ares Management and Apollo Investment
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ares and Apollo is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment Corp and Ares Management 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 Ares Management Corp are associated (or correlated) with Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of Ares Management i.e., Ares Management and Apollo Investment go up and down completely randomly.
Pair Corralation between Ares Management and Apollo Investment
Assuming the 90 days horizon Ares Management Corp is expected to under-perform the Apollo Investment. In addition to that, Ares Management is 2.44 times more volatile than Apollo Investment Corp. It trades about -0.31 of its total potential returns per unit of risk. Apollo Investment Corp is currently generating about 0.32 per unit of volatility. If you would invest 1,307 in Apollo Investment Corp on November 28, 2024 and sell it today you would earn a total of 75.00 from holding Apollo Investment Corp or generate 5.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management Corp vs. Apollo Investment Corp
Performance |
| Timeline |
| Ares Management Corp |
| Apollo Investment Corp |
Ares Management and Apollo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Apollo Investment
The main advantage of trading using opposite Ares Management and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Apollo Investment 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 Investment will offset losses from the drop in Apollo Investment's long position.| Ares Management vs. GOME Retail Holdings | Ares Management vs. BURLINGTON STORES | Ares Management vs. American Public Education | Ares Management vs. STRAYER EDUCATION |
| Apollo Investment vs. Mount Gibson Iron | Apollo Investment vs. CHAMPION IRON | Apollo Investment vs. Hisense Home Appliances | Apollo Investment vs. UNIVERSAL MUSIC GROUP |
Check out your portfolio center.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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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