Correlation Between Apollo Investment and STRAYER EDUCATION
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and STRAYER EDUCATION 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 STRAYER EDUCATION 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 STRAYER EDUCATION, you can compare the effects of market volatilities on Apollo Investment and STRAYER EDUCATION 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 STRAYER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and STRAYER EDUCATION.
Diversification Opportunities for Apollo Investment and STRAYER EDUCATION
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apollo and STRAYER is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and STRAYER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAYER EDUCATION 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 STRAYER EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAYER EDUCATION has no effect on the direction of Apollo Investment i.e., Apollo Investment and STRAYER EDUCATION go up and down completely randomly.
Pair Corralation between Apollo Investment and STRAYER EDUCATION
Assuming the 90 days trading horizon Apollo Investment is expected to generate 1.65 times less return on investment than STRAYER EDUCATION. But when comparing it to its historical volatility, Apollo Investment Corp is 1.84 times less risky than STRAYER EDUCATION. It trades about 0.39 of its potential returns per unit of risk. STRAYER EDUCATION is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 7,900 in STRAYER EDUCATION on September 4, 2024 and sell it today you would earn a total of 1,350 from holding STRAYER EDUCATION or generate 17.09% 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. STRAYER EDUCATION
Performance |
| Timeline |
| Apollo Investment Corp |
| STRAYER EDUCATION |
Apollo Investment and STRAYER EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and STRAYER EDUCATION
The main advantage of trading using opposite Apollo Investment and STRAYER EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, STRAYER EDUCATION 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 STRAYER EDUCATION will offset losses from the drop in STRAYER EDUCATION's long position.| Apollo Investment vs. The Goldman Sachs | Apollo Investment vs. The Goldman Sachs | Apollo Investment vs. Superior Plus Corp | Apollo Investment vs. NMI Holdings |
| STRAYER EDUCATION vs. Vastned Retail NV | STRAYER EDUCATION vs. MACOM Technology Solutions | STRAYER EDUCATION vs. FANDIFI TECHNOLOGY P | STRAYER EDUCATION vs. Vishay Intertechnology |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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