Correlation Between Apollo Investment and BBVA Banco
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and BBVA Banco 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 BBVA Banco 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 BBVA Banco Frances, you can compare the effects of market volatilities on Apollo Investment and BBVA Banco 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 BBVA Banco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and BBVA Banco.
Diversification Opportunities for Apollo Investment and BBVA Banco
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Apollo and BBVA is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and BBVA Banco Frances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBVA Banco Frances 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 BBVA Banco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBVA Banco Frances has no effect on the direction of Apollo Investment i.e., Apollo Investment and BBVA Banco go up and down completely randomly.
Pair Corralation between Apollo Investment and BBVA Banco
Assuming the 90 days trading horizon Apollo Investment is expected to generate 4.56 times less return on investment than BBVA Banco. But when comparing it to its historical volatility, Apollo Investment Corp is 3.97 times less risky than BBVA Banco. It trades about 0.09 of its potential returns per unit of risk. BBVA Banco Frances is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 298.00 in BBVA Banco Frances on December 4, 2024 and sell it today you would earn a total of 1,512 from holding BBVA Banco Frances or generate 507.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.2% |
| Values | Daily Returns |
Apollo Investment Corp vs. BBVA Banco Frances
Performance |
| Timeline |
| Apollo Investment Corp |
| BBVA Banco Frances |
Apollo Investment and BBVA Banco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and BBVA Banco
The main advantage of trading using opposite Apollo Investment and BBVA Banco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, BBVA Banco 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 BBVA Banco will offset losses from the drop in BBVA Banco's long position.| Apollo Investment vs. Eskay Mining Corp | Apollo Investment vs. Applied Materials | Apollo Investment vs. De Grey Mining | Apollo Investment vs. Vulcan Materials |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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