Correlation Between Apollo Investment and Canon
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Canon 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 Canon 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 Canon Inc, you can compare the effects of market volatilities on Apollo Investment and Canon 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 Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Canon.
Diversification Opportunities for Apollo Investment and Canon
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apollo and Canon is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Canon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Inc 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 Canon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Inc has no effect on the direction of Apollo Investment i.e., Apollo Investment and Canon go up and down completely randomly.
Pair Corralation between Apollo Investment and Canon
Assuming the 90 days trading horizon Apollo Investment is expected to generate 1.51 times less return on investment than Canon. But when comparing it to its historical volatility, Apollo Investment Corp is 1.57 times less risky than Canon. It trades about 0.06 of its potential returns per unit of risk. Canon Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,350 in Canon Inc on September 1, 2024 and sell it today you would earn a total of 700.00 from holding Canon Inc or generate 29.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Apollo Investment Corp vs. Canon Inc
Performance |
| Timeline |
| Apollo Investment Corp |
| Canon Inc |
Apollo Investment and Canon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Canon
The main advantage of trading using opposite Apollo Investment and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Canon 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 Canon will offset losses from the drop in Canon's long position.| Apollo Investment vs. USWE SPORTS AB | Apollo Investment vs. PARKEN Sport Entertainment | Apollo Investment vs. SPORTING | Apollo Investment vs. Transport International Holdings |
| Canon vs. FAST RETAIL ADR | Canon vs. 24SEVENOFFICE GROUP AB | Canon vs. Carsales | Canon vs. RETAIL FOOD GROUP |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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