Correlation Between Apollo Investment and Richardson Electronics
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Richardson Electronics 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 Richardson Electronics 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 Richardson Electronics, you can compare the effects of market volatilities on Apollo Investment and Richardson Electronics 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 Richardson Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Richardson Electronics.
Diversification Opportunities for Apollo Investment and Richardson Electronics
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apollo and Richardson is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Richardson Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richardson Electronics 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 Richardson Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richardson Electronics has no effect on the direction of Apollo Investment i.e., Apollo Investment and Richardson Electronics go up and down completely randomly.
Pair Corralation between Apollo Investment and Richardson Electronics
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.33 times more return on investment than Richardson Electronics. However, Apollo Investment Corp is 3.06 times less risky than Richardson Electronics. It trades about 0.07 of its potential returns per unit of risk. Richardson Electronics is currently generating about 0.0 per unit of risk. If you would invest 872.00 in Apollo Investment Corp on October 11, 2024 and sell it today you would earn a total of 447.00 from holding Apollo Investment Corp or generate 51.26% 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. Richardson Electronics
Performance |
| Timeline |
| Apollo Investment Corp |
| Richardson Electronics |
Apollo Investment and Richardson Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Richardson Electronics
The main advantage of trading using opposite Apollo Investment and Richardson Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Richardson Electronics 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 Richardson Electronics will offset losses from the drop in Richardson Electronics' long position.| Apollo Investment vs. Spirent Communications plc | Apollo Investment vs. Shenandoah Telecommunications | Apollo Investment vs. Universal Display | Apollo Investment vs. ADRIATIC METALS LS 013355 |
| Richardson Electronics vs. Apollo Investment Corp | Richardson Electronics vs. MEDCAW INVESTMENTS LS 01 | Richardson Electronics vs. National Beverage Corp | Richardson Electronics vs. CN MODERN DAIRY |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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