Correlation Between Apollo Investment and HK Electric
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and HK Electric 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 HK Electric 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 HK Electric Investments, you can compare the effects of market volatilities on Apollo Investment and HK Electric 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 HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and HK Electric.
Diversification Opportunities for Apollo Investment and HK Electric
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Apollo and HKT is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and HK Electric Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HK Electric 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 HK Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HK Electric Investments has no effect on the direction of Apollo Investment i.e., Apollo Investment and HK Electric go up and down completely randomly.
Pair Corralation between Apollo Investment and HK Electric
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.87 times more return on investment than HK Electric. However, Apollo Investment Corp is 1.16 times less risky than HK Electric. It trades about 0.37 of its potential returns per unit of risk. HK Electric Investments is currently generating about 0.09 per unit of risk. If you would invest 1,307 in Apollo Investment Corp on November 27, 2024 and sell it today you would earn a total of 82.00 from holding Apollo Investment Corp or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. HK Electric Investments
Performance |
| Timeline |
| Apollo Investment Corp |
| HK Electric Investments |
Apollo Investment and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and HK Electric
The main advantage of trading using opposite Apollo Investment and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, HK Electric 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 HK Electric will offset losses from the drop in HK Electric's long position.| Apollo Investment vs. BROADPEAK SA EO | Apollo Investment vs. Jacquet Metal Service | Apollo Investment vs. Gaztransport et technigaz | Apollo Investment vs. Air Transport Services |
| HK Electric vs. Transport International Holdings | HK Electric vs. COLUMBIA SPORTSWEAR | HK Electric vs. SOEDER SPORTFISKE AB | HK Electric vs. Firan Technology Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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