Correlation Between Apollo Investment and Constellation Software
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Constellation Software 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 Constellation Software 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 Constellation Software, you can compare the effects of market volatilities on Apollo Investment and Constellation Software 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 Constellation Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Constellation Software.
Diversification Opportunities for Apollo Investment and Constellation Software
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apollo and Constellation is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Constellation Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Software 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 Constellation Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Software has no effect on the direction of Apollo Investment i.e., Apollo Investment and Constellation Software go up and down completely randomly.
Pair Corralation between Apollo Investment and Constellation Software
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.8 times more return on investment than Constellation Software. However, Apollo Investment Corp is 1.25 times less risky than Constellation Software. It trades about 0.05 of its potential returns per unit of risk. Constellation Software is currently generating about 0.01 per unit of risk. If you would invest 1,230 in Apollo Investment Corp on October 26, 2024 and sell it today you would earn a total of 82.00 from holding Apollo Investment Corp or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. Constellation Software
Performance |
| Timeline |
| Apollo Investment Corp |
| Constellation Software |
Apollo Investment and Constellation Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Constellation Software
The main advantage of trading using opposite Apollo Investment and Constellation Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Constellation Software 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 Constellation Software will offset losses from the drop in Constellation Software's long position.| Apollo Investment vs. Direct Line Insurance | Apollo Investment vs. CHINA EDUCATION GROUP | Apollo Investment vs. VIENNA INSURANCE GR | Apollo Investment vs. CAREER EDUCATION |
| Constellation Software vs. Apollo Investment Corp | Constellation Software vs. AMAG Austria Metall | Constellation Software vs. Osisko Metals | Constellation Software vs. ARDAGH METAL PACDL 0001 |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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