Correlation Between Apollo Investment and Fortescue Metals
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Fortescue Metals 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 Fortescue Metals 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 Fortescue Metals Group, you can compare the effects of market volatilities on Apollo Investment and Fortescue Metals 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 Fortescue Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Fortescue Metals.
Diversification Opportunities for Apollo Investment and Fortescue Metals
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apollo and Fortescue is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Fortescue Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortescue Metals 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 Fortescue Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortescue Metals has no effect on the direction of Apollo Investment i.e., Apollo Investment and Fortescue Metals go up and down completely randomly.
Pair Corralation between Apollo Investment and Fortescue Metals
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.62 times more return on investment than Fortescue Metals. However, Apollo Investment Corp is 1.6 times less risky than Fortescue Metals. It trades about 0.07 of its potential returns per unit of risk. Fortescue Metals Group is currently generating about 0.01 per unit of risk. If you would invest 870.00 in Apollo Investment Corp on October 14, 2024 and sell it today you would earn a total of 402.00 from holding Apollo Investment Corp or generate 46.21% 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. Fortescue Metals Group
Performance |
| Timeline |
| Apollo Investment Corp |
| Fortescue Metals |
Apollo Investment and Fortescue Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Fortescue Metals
The main advantage of trading using opposite Apollo Investment and Fortescue Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Fortescue Metals 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 Fortescue Metals will offset losses from the drop in Fortescue Metals' long position.| Apollo Investment vs. Texas Roadhouse | Apollo Investment vs. Tower Semiconductor | Apollo Investment vs. ELMOS SEMICONDUCTOR | Apollo Investment vs. Air Transport Services |
| Fortescue Metals vs. MidCap Financial Investment | Fortescue Metals vs. JLF INVESTMENT | Fortescue Metals vs. Apollo Investment Corp | Fortescue Metals vs. Cars 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |