Correlation Between Apollo Investment and NIPPON STEEL
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and NIPPON STEEL 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 NIPPON STEEL 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 NIPPON STEEL SPADR, you can compare the effects of market volatilities on Apollo Investment and NIPPON STEEL 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 NIPPON STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and NIPPON STEEL.
Diversification Opportunities for Apollo Investment and NIPPON STEEL
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apollo and NIPPON is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and NIPPON STEEL SPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIPPON STEEL SPADR 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 NIPPON STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIPPON STEEL SPADR has no effect on the direction of Apollo Investment i.e., Apollo Investment and NIPPON STEEL go up and down completely randomly.
Pair Corralation between Apollo Investment and NIPPON STEEL
Assuming the 90 days trading horizon Apollo Investment Corp is expected to under-perform the NIPPON STEEL. But the stock apears to be less risky and, when comparing its historical volatility, Apollo Investment Corp is 1.64 times less risky than NIPPON STEEL. The stock trades about 0.0 of its potential returns per unit of risk. The NIPPON STEEL SPADR is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 630.00 in NIPPON STEEL SPADR on September 3, 2024 and sell it today you would lose (15.00) from holding NIPPON STEEL SPADR or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. NIPPON STEEL SPADR
Performance |
| Timeline |
| Apollo Investment Corp |
| NIPPON STEEL SPADR |
Apollo Investment and NIPPON STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and NIPPON STEEL
The main advantage of trading using opposite Apollo Investment and NIPPON STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, NIPPON STEEL 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 NIPPON STEEL will offset losses from the drop in NIPPON STEEL'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 |
| NIPPON STEEL vs. UNITED RENTALS | NIPPON STEEL vs. PARKEN Sport Entertainment | NIPPON STEEL vs. ADRIATIC METALS LS 013355 | NIPPON STEEL vs. Eastman Chemical |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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