Correlation Between Apollo Investment and CDL INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and CDL INVESTMENT 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 CDL INVESTMENT 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 CDL INVESTMENT, you can compare the effects of market volatilities on Apollo Investment and CDL INVESTMENT 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 CDL INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and CDL INVESTMENT.
Diversification Opportunities for Apollo Investment and CDL INVESTMENT
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apollo and CDL is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and CDL INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDL INVESTMENT 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 CDL INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDL INVESTMENT has no effect on the direction of Apollo Investment i.e., Apollo Investment and CDL INVESTMENT go up and down completely randomly.
Pair Corralation between Apollo Investment and CDL INVESTMENT
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.53 times more return on investment than CDL INVESTMENT. However, Apollo Investment Corp is 1.88 times less risky than CDL INVESTMENT. It trades about 0.07 of its potential returns per unit of risk. CDL INVESTMENT is currently generating about 0.03 per unit of risk. If you would invest 1,042 in Apollo Investment Corp on August 25, 2024 and sell it today you would earn a total of 263.00 from holding Apollo Investment Corp or generate 25.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Apollo Investment Corp vs. CDL INVESTMENT
Performance |
| Timeline |
| Apollo Investment Corp |
| CDL INVESTMENT |
Apollo Investment and CDL INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and CDL INVESTMENT
The main advantage of trading using opposite Apollo Investment and CDL INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, CDL INVESTMENT 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 CDL INVESTMENT will offset losses from the drop in CDL INVESTMENT's long position.| Apollo Investment vs. Macquarie Group Limited | Apollo Investment vs. MSCI Inc | Apollo Investment vs. Superior Plus Corp | Apollo Investment vs. NMI Holdings |
| CDL INVESTMENT vs. United Natural Foods | CDL INVESTMENT vs. Jacquet Metal Service | CDL INVESTMENT vs. SIMS METAL MGT | CDL INVESTMENT vs. Tyson Foods |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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