Correlation Between Apollo Medical and SMA Solar
Can any of the company-specific risk be diversified away by investing in both Apollo Medical and SMA Solar 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 SMA Solar 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 SMA Solar Technology, you can compare the effects of market volatilities on Apollo Medical and SMA Solar 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 SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Medical and SMA Solar.
Diversification Opportunities for Apollo Medical and SMA Solar
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apollo and SMA is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical Holdings and SMA Solar Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMA Solar Technology 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 SMA Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMA Solar Technology has no effect on the direction of Apollo Medical i.e., Apollo Medical and SMA Solar go up and down completely randomly.
Pair Corralation between Apollo Medical and SMA Solar
Assuming the 90 days horizon Apollo Medical Holdings is expected to under-perform the SMA Solar. But the stock apears to be less risky and, when comparing its historical volatility, Apollo Medical Holdings is 2.31 times less risky than SMA Solar. The stock trades about -0.35 of its potential returns per unit of risk. The SMA Solar Technology is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,156 in SMA Solar Technology on September 22, 2024 and sell it today you would earn a total of 195.00 from holding SMA Solar Technology or generate 16.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Medical Holdings vs. SMA Solar Technology
Performance |
| Timeline |
| Apollo Medical Holdings |
| SMA Solar Technology |
Apollo Medical and SMA Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Medical and SMA Solar
The main advantage of trading using opposite Apollo Medical and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Medical position performs unexpectedly, SMA Solar 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 SMA Solar will offset losses from the drop in SMA Solar's long position.| Apollo Medical vs. Meiko Electronics Co | Apollo Medical vs. OFFICE DEPOT | Apollo Medical vs. STMICROELECTRONICS | Apollo Medical vs. Arrow Electronics |
| SMA Solar vs. First Solar | SMA Solar vs. SolarEdge Technologies | SMA Solar vs. Xinyi Solar Holdings | SMA Solar vs. Sunrun Inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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