Correlation Between Apollo Investment and Mitie Group
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Mitie Group 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 Mitie Group 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 Mitie Group PLC, you can compare the effects of market volatilities on Apollo Investment and Mitie Group 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 Mitie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Mitie Group.
Diversification Opportunities for Apollo Investment and Mitie Group
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Apollo and Mitie is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Mitie Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitie Group PLC 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 Mitie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitie Group PLC has no effect on the direction of Apollo Investment i.e., Apollo Investment and Mitie Group go up and down completely randomly.
Pair Corralation between Apollo Investment and Mitie Group
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.43 times more return on investment than Mitie Group. However, Apollo Investment Corp is 2.3 times less risky than Mitie Group. It trades about 0.23 of its potential returns per unit of risk. Mitie Group PLC is currently generating about -0.03 per unit of risk. If you would invest 1,251 in Apollo Investment Corp on August 28, 2024 and sell it today you would earn a total of 83.00 from holding Apollo Investment Corp or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. Mitie Group PLC
Performance |
| Timeline |
| Apollo Investment Corp |
| Mitie Group PLC |
Apollo Investment and Mitie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Mitie Group
The main advantage of trading using opposite Apollo Investment and Mitie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Mitie Group 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 Mitie Group will offset losses from the drop in Mitie Group's long position.| Apollo Investment vs. Macquarie Group Limited | Apollo Investment vs. MSCI Inc | Apollo Investment vs. Superior Plus Corp | Apollo Investment vs. NMI Holdings |
| Mitie Group vs. Apollo Investment Corp | Mitie Group vs. SMA Solar Technology | Mitie Group vs. DXC Technology Co | Mitie Group vs. AECOM TECHNOLOGY |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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