Correlation Between Apollo Investment and Qingling Motors
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Qingling Motors 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 Qingling Motors 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 Qingling Motors Co, you can compare the effects of market volatilities on Apollo Investment and Qingling Motors 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 Qingling Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Qingling Motors.
Diversification Opportunities for Apollo Investment and Qingling Motors
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apollo and Qingling is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Qingling Motors Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingling Motors 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 Qingling Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingling Motors has no effect on the direction of Apollo Investment i.e., Apollo Investment and Qingling Motors go up and down completely randomly.
Pair Corralation between Apollo Investment and Qingling Motors
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.99 times more return on investment than Qingling Motors. However, Apollo Investment Corp is 1.01 times less risky than Qingling Motors. It trades about 0.05 of its potential returns per unit of risk. Qingling Motors Co is currently generating about 0.01 per unit of risk. If you would invest 1,306 in Apollo Investment Corp on October 25, 2024 and sell it today you would earn a total of 14.00 from holding Apollo Investment Corp or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Apollo Investment Corp vs. Qingling Motors Co
Performance |
| Timeline |
| Apollo Investment Corp |
| Qingling Motors |
Apollo Investment and Qingling Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Qingling Motors
The main advantage of trading using opposite Apollo Investment and Qingling Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Qingling Motors 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 Qingling Motors will offset losses from the drop in Qingling Motors' long position.| Apollo Investment vs. TreeHouse Foods | Apollo Investment vs. Cal Maine Foods | Apollo Investment vs. PRECISION DRILLING P | Apollo Investment vs. CENTURIA OFFICE REIT |
| Qingling Motors vs. PURE FOODS TASMANIA | Qingling Motors vs. Molson Coors Beverage | Qingling Motors vs. TreeHouse Foods | Qingling Motors 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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