Correlation Between Apollo Investment and SalMar ASA
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and SalMar ASA 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 SalMar ASA 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 SalMar ASA, you can compare the effects of market volatilities on Apollo Investment and SalMar ASA 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 SalMar ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and SalMar ASA.
Diversification Opportunities for Apollo Investment and SalMar ASA
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apollo and SalMar is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar ASA 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 SalMar ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of Apollo Investment i.e., Apollo Investment and SalMar ASA go up and down completely randomly.
Pair Corralation between Apollo Investment and SalMar ASA
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.67 times more return on investment than SalMar ASA. However, Apollo Investment Corp is 1.49 times less risky than SalMar ASA. It trades about 0.0 of its potential returns per unit of risk. SalMar ASA is currently generating about -0.03 per unit of risk. If you would invest 1,359 in Apollo Investment Corp on September 3, 2024 and sell it today you would lose (17.00) from holding Apollo Investment Corp or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. SalMar ASA
Performance |
| Timeline |
| Apollo Investment Corp |
| SalMar ASA |
Apollo Investment and SalMar ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and SalMar ASA
The main advantage of trading using opposite Apollo Investment and SalMar ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, SalMar ASA 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 SalMar ASA will offset losses from the drop in SalMar ASA's long position.| Apollo Investment vs. Morgan Stanley | Apollo Investment vs. The Goldman Sachs | Apollo Investment vs. The Goldman Sachs | Apollo Investment vs. Superior Plus Corp |
| SalMar ASA vs. Cal Maine Foods | SalMar ASA vs. Sumitomo Mitsui Construction | SalMar ASA vs. Dairy Farm International | SalMar ASA vs. Food Life Companies |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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