Correlation Between Apollo Investment and CARGOJET INC
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and CARGOJET INC 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 CARGOJET INC 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 CARGOJET INC VAR, you can compare the effects of market volatilities on Apollo Investment and CARGOJET INC 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 CARGOJET INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and CARGOJET INC.
Diversification Opportunities for Apollo Investment and CARGOJET INC
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apollo and CARGOJET is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and CARGOJET INC VAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARGOJET INC VAR 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 CARGOJET INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARGOJET INC VAR has no effect on the direction of Apollo Investment i.e., Apollo Investment and CARGOJET INC go up and down completely randomly.
Pair Corralation between Apollo Investment and CARGOJET INC
Assuming the 90 days trading horizon Apollo Investment is expected to generate 4.08 times less return on investment than CARGOJET INC. But when comparing it to its historical volatility, Apollo Investment Corp is 1.47 times less risky than CARGOJET INC. It trades about 0.1 of its potential returns per unit of risk. CARGOJET INC VAR is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 7,350 in CARGOJET INC VAR on November 3, 2024 and sell it today you would earn a total of 850.00 from holding CARGOJET INC VAR or generate 11.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. CARGOJET INC VAR
Performance |
| Timeline |
| Apollo Investment Corp |
| CARGOJET INC VAR |
Apollo Investment and CARGOJET INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and CARGOJET INC
The main advantage of trading using opposite Apollo Investment and CARGOJET INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, CARGOJET INC 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 CARGOJET INC will offset losses from the drop in CARGOJET INC's long position.| Apollo Investment vs. Morgan Stanley | Apollo Investment vs. Morgan Stanley | Apollo Investment vs. The Charles Schwab | Apollo Investment vs. The Goldman Sachs |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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