Correlation Between Apollo Investment and Ribbon Communications
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Ribbon Communications 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 Ribbon Communications 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 Ribbon Communications, you can compare the effects of market volatilities on Apollo Investment and Ribbon Communications 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 Ribbon Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Ribbon Communications.
Diversification Opportunities for Apollo Investment and Ribbon Communications
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apollo and Ribbon is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Ribbon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ribbon Communications 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 Ribbon Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ribbon Communications has no effect on the direction of Apollo Investment i.e., Apollo Investment and Ribbon Communications go up and down completely randomly.
Pair Corralation between Apollo Investment and Ribbon Communications
Assuming the 90 days trading horizon Apollo Investment Corp is expected to under-perform the Ribbon Communications. But the stock apears to be less risky and, when comparing its historical volatility, Apollo Investment Corp is 2.52 times less risky than Ribbon Communications. The stock trades about -0.01 of its potential returns per unit of risk. The Ribbon Communications is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 334.00 in Ribbon Communications on October 19, 2024 and sell it today you would earn a total of 52.00 from holding Ribbon Communications or generate 15.57% 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. Ribbon Communications
Performance |
| Timeline |
| Apollo Investment Corp |
| Ribbon Communications |
Apollo Investment and Ribbon Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Ribbon Communications
The main advantage of trading using opposite Apollo Investment and Ribbon Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Ribbon Communications 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 Ribbon Communications will offset losses from the drop in Ribbon Communications' long position.| Apollo Investment vs. Broadwind | Apollo Investment vs. PKSHA TECHNOLOGY INC | Apollo Investment vs. FANDIFI TECHNOLOGY P | Apollo Investment vs. NAGOYA RAILROAD |
| Ribbon Communications vs. Virtus Investment Partners | Ribbon Communications vs. ITALIAN WINE BRANDS | Ribbon Communications vs. Keck Seng Investments | Ribbon Communications vs. Apollo Investment Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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