Correlation Between Apollo Investment and ELECTRONIC ARTS
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and ELECTRONIC ARTS 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 ELECTRONIC ARTS 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 ELECTRONIC ARTS, you can compare the effects of market volatilities on Apollo Investment and ELECTRONIC ARTS 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 ELECTRONIC ARTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and ELECTRONIC ARTS.
Diversification Opportunities for Apollo Investment and ELECTRONIC ARTS
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apollo and ELECTRONIC is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and ELECTRONIC ARTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTRONIC ARTS 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 ELECTRONIC ARTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELECTRONIC ARTS has no effect on the direction of Apollo Investment i.e., Apollo Investment and ELECTRONIC ARTS go up and down completely randomly.
Pair Corralation between Apollo Investment and ELECTRONIC ARTS
Assuming the 90 days trading horizon Apollo Investment Corp is expected to under-perform the ELECTRONIC ARTS. But the stock apears to be less risky and, when comparing its historical volatility, Apollo Investment Corp is 1.59 times less risky than ELECTRONIC ARTS. The stock trades about -0.02 of its potential returns per unit of risk. The ELECTRONIC ARTS is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 11,228 in ELECTRONIC ARTS on December 1, 2024 and sell it today you would earn a total of 1,298 from holding ELECTRONIC ARTS or generate 11.56% 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. ELECTRONIC ARTS
Performance |
| Timeline |
| Apollo Investment Corp |
| ELECTRONIC ARTS |
Apollo Investment and ELECTRONIC ARTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and ELECTRONIC ARTS
The main advantage of trading using opposite Apollo Investment and ELECTRONIC ARTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, ELECTRONIC ARTS 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 ELECTRONIC ARTS will offset losses from the drop in ELECTRONIC ARTS's long position.| Apollo Investment vs. Sligro Food Group | Apollo Investment vs. BG Foods | Apollo Investment vs. Caseys General Stores | Apollo Investment vs. EBRO FOODS |
| ELECTRONIC ARTS vs. LAir Liquide SA | ELECTRONIC ARTS vs. METHODE ELECTRONICS | ELECTRONIC ARTS vs. Electronic Arts | ELECTRONIC ARTS vs. ALTAIR RES INC |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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