Correlation Between WisdomTree Investments and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both WisdomTree Investments 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 WisdomTree Investments and Apollo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Investments and Apollo Investment Corp, you can compare the effects of market volatilities on WisdomTree Investments 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 WisdomTree Investments with a short position of Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Investments and Apollo Investment.
Diversification Opportunities for WisdomTree Investments and Apollo Investment
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and Apollo is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Investments 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 WisdomTree Investments 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 WisdomTree Investments 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 WisdomTree Investments i.e., WisdomTree Investments and Apollo Investment go up and down completely randomly.
Pair Corralation between WisdomTree Investments and Apollo Investment
Assuming the 90 days horizon WisdomTree Investments is expected to generate 2.64 times more return on investment than Apollo Investment. However, WisdomTree Investments is 2.64 times more volatile than Apollo Investment Corp. It trades about 0.25 of its potential returns per unit of risk. Apollo Investment Corp is currently generating about 0.26 per unit of risk. If you would invest 946.00 in WisdomTree Investments on August 31, 2024 and sell it today you would earn a total of 187.00 from holding WisdomTree Investments or generate 19.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Investments vs. Apollo Investment Corp
Performance |
| Timeline |
| WisdomTree Investments |
| Apollo Investment Corp |
WisdomTree Investments and Apollo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Investments and Apollo Investment
The main advantage of trading using opposite WisdomTree Investments and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Investments 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.| WisdomTree Investments vs. Ameriprise Financial | WisdomTree Investments vs. Ares Management Corp | WisdomTree Investments vs. Superior Plus Corp | WisdomTree Investments vs. NMI Holdings |
| Apollo Investment vs. Morgan Stanley | Apollo Investment vs. The Goldman Sachs | Apollo Investment vs. Superior Plus Corp | Apollo Investment vs. NMI Holdings |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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