Correlation Between Apollo Investment and Chuangs China
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Chuangs China 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 Chuangs China 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 Chuangs China Investments, you can compare the effects of market volatilities on Apollo Investment and Chuangs China 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 Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Chuangs China.
Diversification Opportunities for Apollo Investment and Chuangs China
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apollo and Chuangs is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments 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 Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of Apollo Investment i.e., Apollo Investment and Chuangs China go up and down completely randomly.
Pair Corralation between Apollo Investment and Chuangs China
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.2 times more return on investment than Chuangs China. However, Apollo Investment Corp is 5.02 times less risky than Chuangs China. It trades about 0.07 of its potential returns per unit of risk. Chuangs China Investments is currently generating about 0.01 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 | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. Chuangs China Investments
Performance |
| Timeline |
| Apollo Investment Corp |
| Chuangs China Investments |
Apollo Investment and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Chuangs China
The main advantage of trading using opposite Apollo Investment and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China'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 |
| Chuangs China vs. SHIN ETSU CHEMICAL | Chuangs China vs. URBAN OUTFITTERS | Chuangs China vs. Quaker Chemical | Chuangs China vs. DEVRY EDUCATION GRP |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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