Correlation Between Apollo Medical and Neste Oyj
Can any of the company-specific risk be diversified away by investing in both Apollo Medical and Neste Oyj 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 Apollo Medical and Neste Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Medical Holdings and Neste Oyj, you can compare the effects of market volatilities on Apollo Medical and Neste Oyj 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 Apollo Medical with a short position of Neste Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Medical and Neste Oyj.
Diversification Opportunities for Apollo Medical and Neste Oyj
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apollo and Neste is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical Holdings and Neste Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neste Oyj and Apollo Medical 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 Apollo Medical Holdings are associated (or correlated) with Neste Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neste Oyj has no effect on the direction of Apollo Medical i.e., Apollo Medical and Neste Oyj go up and down completely randomly.
Pair Corralation between Apollo Medical and Neste Oyj
Assuming the 90 days horizon Apollo Medical Holdings is expected to generate 0.88 times more return on investment than Neste Oyj. However, Apollo Medical Holdings is 1.14 times less risky than Neste Oyj. It trades about 0.04 of its potential returns per unit of risk. Neste Oyj is currently generating about -0.08 per unit of risk. If you would invest 2,774 in Apollo Medical Holdings on September 3, 2024 and sell it today you would earn a total of 1,226 from holding Apollo Medical Holdings or generate 44.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Apollo Medical Holdings vs. Neste Oyj
Performance |
| Timeline |
| Apollo Medical Holdings |
| Neste Oyj |
Apollo Medical and Neste Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Medical and Neste Oyj
The main advantage of trading using opposite Apollo Medical and Neste Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Medical position performs unexpectedly, Neste Oyj 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 Neste Oyj will offset losses from the drop in Neste Oyj's long position.| Apollo Medical vs. MAGNUM MINING EXP | Apollo Medical vs. AVITA Medical | Apollo Medical vs. American Eagle Outfitters | Apollo Medical vs. Zijin Mining Group |
| Neste Oyj vs. PSI Software AG | Neste Oyj vs. AXWAY SOFTWARE EO | Neste Oyj vs. Guidewire Software | Neste Oyj vs. Axway Software SA |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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