Correlation Between Apollo Investment and Dow
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Dow 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 Investment and Dow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Investment Corp and Dow Inc, you can compare the effects of market volatilities on Apollo Investment and Dow 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 Investment with a short position of Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Dow.
Diversification Opportunities for Apollo Investment and Dow
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Apollo and Dow is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Dow Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Inc and Apollo Investment 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 Investment Corp are associated (or correlated) with Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Inc has no effect on the direction of Apollo Investment i.e., Apollo Investment and Dow go up and down completely randomly.
Pair Corralation between Apollo Investment and Dow
Assuming the 90 days trading horizon Apollo Investment is expected to generate 1.69 times less return on investment than Dow. In addition to that, Apollo Investment is 1.03 times more volatile than Dow Inc. It trades about 0.05 of its total potential returns per unit of risk. Dow Inc is currently generating about 0.09 per unit of volatility. If you would invest 3,872 in Dow Inc on October 25, 2024 and sell it today you would earn a total of 75.00 from holding Dow Inc or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. Dow Inc
Performance |
| Timeline |
| Apollo Investment Corp |
| Dow Inc |
Apollo Investment and Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Dow
The main advantage of trading using opposite Apollo Investment and Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Dow 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 Dow will offset losses from the drop in Dow's long position.| Apollo Investment vs. TreeHouse Foods | Apollo Investment vs. Cal Maine Foods | Apollo Investment vs. PRECISION DRILLING P | Apollo Investment vs. CENTURIA OFFICE REIT |
| Dow vs. PennantPark Investment | Dow vs. Brockhaus Capital Management | Dow vs. Apollo Investment Corp | Dow vs. PennyMac Mortgage Investment |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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