Correlation Between Apollo Investment and TRAINLINE PLC
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and TRAINLINE PLC 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 TRAINLINE PLC 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 TRAINLINE PLC LS, you can compare the effects of market volatilities on Apollo Investment and TRAINLINE PLC 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 TRAINLINE PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and TRAINLINE PLC.
Diversification Opportunities for Apollo Investment and TRAINLINE PLC
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apollo and TRAINLINE is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and TRAINLINE PLC LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAINLINE PLC LS 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 TRAINLINE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAINLINE PLC LS has no effect on the direction of Apollo Investment i.e., Apollo Investment and TRAINLINE PLC go up and down completely randomly.
Pair Corralation between Apollo Investment and TRAINLINE PLC
Assuming the 90 days trading horizon Apollo Investment is expected to generate 1.15 times less return on investment than TRAINLINE PLC. But when comparing it to its historical volatility, Apollo Investment Corp is 2.07 times less risky than TRAINLINE PLC. It trades about 0.07 of its potential returns per unit of risk. TRAINLINE PLC LS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 342.00 in TRAINLINE PLC LS on October 13, 2024 and sell it today you would earn a total of 124.00 from holding TRAINLINE PLC LS or generate 36.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. TRAINLINE PLC LS
Performance |
| Timeline |
| Apollo Investment Corp |
| TRAINLINE PLC LS |
Apollo Investment and TRAINLINE PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and TRAINLINE PLC
The main advantage of trading using opposite Apollo Investment and TRAINLINE PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, TRAINLINE PLC 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 TRAINLINE PLC will offset losses from the drop in TRAINLINE PLC's long position.| Apollo Investment vs. Texas Roadhouse | Apollo Investment vs. Tower Semiconductor | Apollo Investment vs. ELMOS SEMICONDUCTOR | Apollo Investment vs. Air Transport Services |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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