Correlation Between Apollo Investment and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Gamma Communications 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 Gamma Communications 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 Gamma Communications plc, you can compare the effects of market volatilities on Apollo Investment and Gamma Communications 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 Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Gamma Communications.
Diversification Opportunities for Apollo Investment and Gamma Communications
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apollo and Gamma is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Gamma Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications plc 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 Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications plc has no effect on the direction of Apollo Investment i.e., Apollo Investment and Gamma Communications go up and down completely randomly.
Pair Corralation between Apollo Investment and Gamma Communications
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.63 times more return on investment than Gamma Communications. However, Apollo Investment Corp is 1.58 times less risky than Gamma Communications. It trades about 0.25 of its potential returns per unit of risk. Gamma Communications plc is currently generating about 0.09 per unit of risk. If you would invest 1,234 in Apollo Investment Corp on September 14, 2024 and sell it today you would earn a total of 58.00 from holding Apollo Investment Corp or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. Gamma Communications plc
Performance |
| Timeline |
| Apollo Investment Corp |
| Gamma Communications plc |
Apollo Investment and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Gamma Communications
The main advantage of trading using opposite Apollo Investment and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.| Apollo Investment vs. Superior Plus Corp | Apollo Investment vs. SIVERS SEMICONDUCTORS AB | Apollo Investment vs. CHINA HUARONG ENERHD 50 | Apollo Investment vs. NORDIC HALIBUT AS |
| Gamma Communications vs. Superior Plus Corp | Gamma Communications vs. SIVERS SEMICONDUCTORS AB | Gamma Communications vs. Norsk Hydro ASA | Gamma Communications vs. Reliance Steel Aluminum |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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