Correlation Between Apollo Investment and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Nomura Holdings 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 Nomura Holdings 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 Nomura Holdings, you can compare the effects of market volatilities on Apollo Investment and Nomura Holdings 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 Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Nomura Holdings.
Diversification Opportunities for Apollo Investment and Nomura Holdings
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apollo and Nomura is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Nomura Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Holdings 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 Nomura Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomura Holdings has no effect on the direction of Apollo Investment i.e., Apollo Investment and Nomura Holdings go up and down completely randomly.
Pair Corralation between Apollo Investment and Nomura Holdings
Assuming the 90 days trading horizon Apollo Investment is expected to generate 2.18 times less return on investment than Nomura Holdings. But when comparing it to its historical volatility, Apollo Investment Corp is 1.71 times less risky than Nomura Holdings. It trades about 0.06 of its potential returns per unit of risk. Nomura Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 353.00 in Nomura Holdings on October 16, 2024 and sell it today you would earn a total of 198.00 from holding Nomura Holdings or generate 56.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. Nomura Holdings
Performance |
| Timeline |
| Apollo Investment Corp |
| Nomura Holdings |
Apollo Investment and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Nomura Holdings
The main advantage of trading using opposite Apollo Investment and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Nomura Holdings 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 Nomura Holdings will offset losses from the drop in Nomura Holdings' long position.| Apollo Investment vs. TERADATA | Apollo Investment vs. InPlay Oil Corp | Apollo Investment vs. China Datang | Apollo Investment vs. DATATEC LTD 2 |
| Nomura Holdings vs. Ebro Foods SA | Nomura Holdings vs. IMPERIAL TOBACCO | Nomura Holdings vs. United Natural Foods | Nomura Holdings vs. Tyson Foods |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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