Correlation Between Apollo Investment and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and INSURANCE AUST 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 INSURANCE AUST 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 INSURANCE AUST GRP, you can compare the effects of market volatilities on Apollo Investment and INSURANCE AUST 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 INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and INSURANCE AUST.
Diversification Opportunities for Apollo Investment and INSURANCE AUST
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apollo and INSURANCE is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP 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 INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of Apollo Investment i.e., Apollo Investment and INSURANCE AUST go up and down completely randomly.
Pair Corralation between Apollo Investment and INSURANCE AUST
Assuming the 90 days trading horizon Apollo Investment is expected to generate 1.68 times less return on investment than INSURANCE AUST. But when comparing it to its historical volatility, Apollo Investment Corp is 1.2 times less risky than INSURANCE AUST. It trades about 0.07 of its potential returns per unit of risk. INSURANCE AUST GRP is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 270.00 in INSURANCE AUST GRP on October 25, 2024 and sell it today you would earn a total of 255.00 from holding INSURANCE AUST GRP or generate 94.44% 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. INSURANCE AUST GRP
Performance |
| Timeline |
| Apollo Investment Corp |
| INSURANCE AUST GRP |
Apollo Investment and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and INSURANCE AUST
The main advantage of trading using opposite Apollo Investment and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, INSURANCE AUST 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 INSURANCE AUST will offset losses from the drop in INSURANCE AUST's long position.| Apollo Investment vs. Direct Line Insurance | Apollo Investment vs. CHINA EDUCATION GROUP | Apollo Investment vs. VIENNA INSURANCE GR | Apollo Investment vs. CAREER EDUCATION |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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