Correlation Between Apollo Investment and Walt Disney
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Walt Disney 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 Walt Disney 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 The Walt Disney, you can compare the effects of market volatilities on Apollo Investment and Walt Disney 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 Walt Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Walt Disney.
Diversification Opportunities for Apollo Investment and Walt Disney
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Apollo and Walt is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and The Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney 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 Walt Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Apollo Investment i.e., Apollo Investment and Walt Disney go up and down completely randomly.
Pair Corralation between Apollo Investment and Walt Disney
Assuming the 90 days trading horizon Apollo Investment is expected to generate 1.24 times less return on investment than Walt Disney. But when comparing it to its historical volatility, Apollo Investment Corp is 1.37 times less risky than Walt Disney. It trades about 0.07 of its potential returns per unit of risk. The Walt Disney is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,716 in The Walt Disney on September 12, 2024 and sell it today you would earn a total of 3,170 from holding The Walt Disney or generate 41.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. The Walt Disney
Performance |
| Timeline |
| Apollo Investment Corp |
| Walt Disney |
Apollo Investment and Walt Disney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Walt Disney
The main advantage of trading using opposite Apollo Investment and Walt Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Walt Disney 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 Walt Disney will offset losses from the drop in Walt Disney's long position.| Apollo Investment vs. Superior Plus Corp | Apollo Investment vs. SIVERS SEMICONDUCTORS AB | Apollo Investment vs. CHINA HUARONG ENERHD 50 | Apollo Investment vs. NORDIC HALIBUT AS |
| Walt Disney vs. Align Technology | Walt Disney vs. Lendlease Group | Walt Disney vs. EIDESVIK OFFSHORE NK | Walt Disney vs. MACOM Technology Solutions |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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