Correlation Between Apollo Investment and Seven West
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Seven West 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 Seven West 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 Seven West Media, you can compare the effects of market volatilities on Apollo Investment and Seven West 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 Seven West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Seven West.
Diversification Opportunities for Apollo Investment and Seven West
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apollo and Seven is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Seven West Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven West Media 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 Seven West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven West Media has no effect on the direction of Apollo Investment i.e., Apollo Investment and Seven West go up and down completely randomly.
Pair Corralation between Apollo Investment and Seven West
Assuming the 90 days trading horizon Apollo Investment is expected to generate 8.32 times less return on investment than Seven West. But when comparing it to its historical volatility, Apollo Investment Corp is 3.44 times less risky than Seven West. It trades about 0.05 of its potential returns per unit of risk. Seven West Media is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 8.05 in Seven West Media on October 24, 2024 and sell it today you would earn a total of 0.60 from holding Seven West Media or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. Seven West Media
Performance |
| Timeline |
| Apollo Investment Corp |
| Seven West Media |
Apollo Investment and Seven West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Seven West
The main advantage of trading using opposite Apollo Investment and Seven West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Seven West 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 Seven West will offset losses from the drop in Seven West's long position.| Apollo Investment vs. Webster Financial | Apollo Investment vs. VIVA WINE GROUP | Apollo Investment vs. Sun Life Financial | Apollo Investment vs. NAKED WINES PLC |
| Seven West vs. American Airlines Group | Seven West vs. Apollo Investment Corp | Seven West vs. AEGEAN AIRLINES | Seven West vs. International Consolidated Airlines |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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