Correlation Between Apollo Investment and Laureate Education
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Laureate Education 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 Laureate Education 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 Laureate Education, you can compare the effects of market volatilities on Apollo Investment and Laureate Education 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 Laureate Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Laureate Education.
Diversification Opportunities for Apollo Investment and Laureate Education
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apollo and Laureate is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Laureate Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laureate Education 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 Laureate Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laureate Education has no effect on the direction of Apollo Investment i.e., Apollo Investment and Laureate Education go up and down completely randomly.
Pair Corralation between Apollo Investment and Laureate Education
Assuming the 90 days trading horizon Apollo Investment is expected to generate 1.66 times less return on investment than Laureate Education. But when comparing it to its historical volatility, Apollo Investment Corp is 1.75 times less risky than Laureate Education. It trades about 0.09 of its potential returns per unit of risk. Laureate Education is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,001 in Laureate Education on September 12, 2024 and sell it today you would earn a total of 739.00 from holding Laureate Education or generate 73.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. Laureate Education
Performance |
| Timeline |
| Apollo Investment Corp |
| Laureate Education |
Apollo Investment and Laureate Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Laureate Education
The main advantage of trading using opposite Apollo Investment and Laureate Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Laureate Education 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 Laureate Education will offset losses from the drop in Laureate Education's long position.| Apollo Investment vs. Superior Plus Corp | Apollo Investment vs. SIVERS SEMICONDUCTORS AB | Apollo Investment vs. CHINA HUARONG ENERHD 50 | Apollo Investment vs. NORDIC HALIBUT AS |
| Laureate Education vs. AWILCO DRILLING PLC | Laureate Education vs. EHEALTH | Laureate Education vs. National Health Investors | Laureate Education vs. STRAYER EDUCATION |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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