Correlation Between Apollo Investment and GEAR4MUSIC
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and GEAR4MUSIC 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 GEAR4MUSIC 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 GEAR4MUSIC LS 10, you can compare the effects of market volatilities on Apollo Investment and GEAR4MUSIC 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 GEAR4MUSIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and GEAR4MUSIC.
Diversification Opportunities for Apollo Investment and GEAR4MUSIC
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apollo and GEAR4MUSIC is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and GEAR4MUSIC LS 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEAR4MUSIC LS 10 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 GEAR4MUSIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEAR4MUSIC LS 10 has no effect on the direction of Apollo Investment i.e., Apollo Investment and GEAR4MUSIC go up and down completely randomly.
Pair Corralation between Apollo Investment and GEAR4MUSIC
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.35 times more return on investment than GEAR4MUSIC. However, Apollo Investment Corp is 2.83 times less risky than GEAR4MUSIC. It trades about 0.03 of its potential returns per unit of risk. GEAR4MUSIC LS 10 is currently generating about -0.06 per unit of risk. If you would invest 1,296 in Apollo Investment Corp on October 26, 2024 and sell it today you would earn a total of 16.00 from holding Apollo Investment Corp or generate 1.23% 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. GEAR4MUSIC LS 10
Performance |
| Timeline |
| Apollo Investment Corp |
| GEAR4MUSIC LS 10 |
Apollo Investment and GEAR4MUSIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and GEAR4MUSIC
The main advantage of trading using opposite Apollo Investment and GEAR4MUSIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, GEAR4MUSIC 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 GEAR4MUSIC will offset losses from the drop in GEAR4MUSIC's long position.| Apollo Investment vs. Direct Line Insurance | Apollo Investment vs. CHINA EDUCATION GROUP | Apollo Investment vs. VIENNA INSURANCE GR | Apollo Investment vs. CAREER EDUCATION |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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