Correlation Between Apollo Medical and Penn National
Can any of the company-specific risk be diversified away by investing in both Apollo Medical and Penn National 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 Penn National 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 Penn National Gaming, you can compare the effects of market volatilities on Apollo Medical and Penn National 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 Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Medical and Penn National.
Diversification Opportunities for Apollo Medical and Penn National
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apollo and Penn is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical Holdings and Penn National Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penn National Gaming 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 Penn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penn National Gaming has no effect on the direction of Apollo Medical i.e., Apollo Medical and Penn National go up and down completely randomly.
Pair Corralation between Apollo Medical and Penn National
Assuming the 90 days horizon Apollo Medical is expected to generate 1.14 times less return on investment than Penn National. In addition to that, Apollo Medical is 1.0 times more volatile than Penn National Gaming. It trades about 0.12 of its total potential returns per unit of risk. Penn National Gaming is currently generating about 0.14 per unit of volatility. If you would invest 1,781 in Penn National Gaming on October 23, 2024 and sell it today you would earn a total of 130.00 from holding Penn National Gaming or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Medical Holdings vs. Penn National Gaming
Performance |
| Timeline |
| Apollo Medical Holdings |
| Penn National Gaming |
Apollo Medical and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Medical and Penn National
The main advantage of trading using opposite Apollo Medical and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Medical position performs unexpectedly, Penn National 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 Penn National will offset losses from the drop in Penn National's long position.| Apollo Medical vs. Renesas Electronics | Apollo Medical vs. Electronic Arts | Apollo Medical vs. Semiconductor Manufacturing International | Apollo Medical vs. TOREX SEMICONDUCTOR LTD |
| Penn National vs. Apollo Medical Holdings | Penn National vs. Datadog | Penn National vs. MICRONIC MYDATA | Penn National vs. Northern Data AG |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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