Correlation Between Apollo Investment and WILLIS LEASE
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and WILLIS LEASE 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 WILLIS LEASE 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 WILLIS LEASE FIN, you can compare the effects of market volatilities on Apollo Investment and WILLIS LEASE 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 WILLIS LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and WILLIS LEASE.
Diversification Opportunities for Apollo Investment and WILLIS LEASE
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apollo and WILLIS is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and WILLIS LEASE FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WILLIS LEASE FIN 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 WILLIS LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WILLIS LEASE FIN has no effect on the direction of Apollo Investment i.e., Apollo Investment and WILLIS LEASE go up and down completely randomly.
Pair Corralation between Apollo Investment and WILLIS LEASE
Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.63 times more return on investment than WILLIS LEASE. However, Apollo Investment Corp is 1.59 times less risky than WILLIS LEASE. It trades about 0.08 of its potential returns per unit of risk. WILLIS LEASE FIN is currently generating about -0.29 per unit of risk. If you would invest 1,319 in Apollo Investment Corp on November 5, 2024 and sell it today you would earn a total of 24.00 from holding Apollo Investment Corp or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. WILLIS LEASE FIN
Performance |
| Timeline |
| Apollo Investment Corp |
| WILLIS LEASE FIN |
Apollo Investment and WILLIS LEASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and WILLIS LEASE
The main advantage of trading using opposite Apollo Investment and WILLIS LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, WILLIS LEASE 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 WILLIS LEASE will offset losses from the drop in WILLIS LEASE's long position.| Apollo Investment vs. Molson Coors Beverage | Apollo Investment vs. BOSTON BEER A | Apollo Investment vs. CHRYSALIS INVESTMENTS LTD | Apollo Investment vs. Thai Beverage Public |
| WILLIS LEASE vs. UNITED UTILITIES GR | WILLIS LEASE vs. REINET INVESTMENTS SCA | WILLIS LEASE vs. Haverty Furniture Companies | WILLIS LEASE vs. CHRYSALIS INVESTMENTS LTD |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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