Correlation Between Apollo Investment and CSL
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and CSL 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 CSL 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 CSL LTD SPONADR, you can compare the effects of market volatilities on Apollo Investment and CSL 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 CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and CSL.
Diversification Opportunities for Apollo Investment and CSL
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apollo and CSL is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and CSL LTD SPONADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL LTD SPONADR 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL LTD SPONADR has no effect on the direction of Apollo Investment i.e., Apollo Investment and CSL go up and down completely randomly.
Pair Corralation between Apollo Investment and CSL
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.66 times more return on investment than CSL. However, Apollo Investment Corp is 1.51 times less risky than CSL. It trades about 0.23 of its potential returns per unit of risk. CSL LTD SPONADR is currently generating about -0.07 per unit of risk. If you would invest 1,251 in Apollo Investment Corp on August 29, 2024 and sell it today you would earn a total of 86.00 from holding Apollo Investment Corp or generate 6.87% 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. CSL LTD SPONADR
Performance |
| Timeline |
| Apollo Investment Corp |
| CSL LTD SPONADR |
Apollo Investment and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and CSL
The main advantage of trading using opposite Apollo Investment and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL'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 |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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