Correlation Between Apollo Investment and Broadwind
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Broadwind 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 Broadwind 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 Broadwind, you can compare the effects of market volatilities on Apollo Investment and Broadwind 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 Broadwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Broadwind.
Diversification Opportunities for Apollo Investment and Broadwind
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apollo and Broadwind is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Broadwind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadwind 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 Broadwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadwind has no effect on the direction of Apollo Investment i.e., Apollo Investment and Broadwind go up and down completely randomly.
Pair Corralation between Apollo Investment and Broadwind
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.28 times more return on investment than Broadwind. However, Apollo Investment Corp is 3.58 times less risky than Broadwind. It trades about 0.07 of its potential returns per unit of risk. Broadwind is currently generating about -0.02 per unit of risk. If you would invest 868.00 in Apollo Investment Corp on October 16, 2024 and sell it today you would earn a total of 413.00 from holding Apollo Investment Corp or generate 47.58% 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. Broadwind
Performance |
| Timeline |
| Apollo Investment Corp |
| Broadwind |
Apollo Investment and Broadwind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Broadwind
The main advantage of trading using opposite Apollo Investment and Broadwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Broadwind 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 Broadwind will offset losses from the drop in Broadwind's long position.| Apollo Investment vs. TERADATA | Apollo Investment vs. InPlay Oil Corp | Apollo Investment vs. China Datang | Apollo Investment vs. DATATEC LTD 2 |
| Broadwind vs. Apollo Investment Corp | Broadwind vs. ALERION CLEANPOWER | Broadwind vs. WisdomTree Investments | Broadwind vs. PennantPark 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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