Correlation Between Apollo Investment and Nufarm
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Nufarm 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 Nufarm 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 Nufarm Limited, you can compare the effects of market volatilities on Apollo Investment and Nufarm 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 Nufarm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Nufarm.
Diversification Opportunities for Apollo Investment and Nufarm
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apollo and Nufarm is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Nufarm Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm Limited 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 Nufarm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm Limited has no effect on the direction of Apollo Investment i.e., Apollo Investment and Nufarm go up and down completely randomly.
Pair Corralation between Apollo Investment and Nufarm
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.67 times more return on investment than Nufarm. However, Apollo Investment Corp is 1.49 times less risky than Nufarm. It trades about 0.06 of its potential returns per unit of risk. Nufarm Limited is currently generating about -0.05 per unit of risk. If you would invest 922.00 in Apollo Investment Corp on October 16, 2024 and sell it today you would earn a total of 359.00 from holding Apollo Investment Corp or generate 38.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. Nufarm Limited
Performance |
| Timeline |
| Apollo Investment Corp |
| Nufarm Limited |
Apollo Investment and Nufarm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Nufarm
The main advantage of trading using opposite Apollo Investment and Nufarm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Nufarm 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 Nufarm will offset losses from the drop in Nufarm's long position.| Apollo Investment vs. EMBARK EDUCATION LTD | Apollo Investment vs. Applied Materials | Apollo Investment vs. Materialise NV | Apollo Investment vs. Vulcan Materials |
| Nufarm vs. ECHO INVESTMENT ZY | Nufarm vs. Coffee Holding Co | Nufarm vs. Luckin Coffee | Nufarm 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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