Correlation Between Gamma Communications and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both Gamma Communications and Apollo Investment 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 Gamma Communications and Apollo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamma Communications plc and Apollo Investment Corp, you can compare the effects of market volatilities on Gamma Communications and Apollo Investment 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 Gamma Communications with a short position of Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Apollo Investment.
Diversification Opportunities for Gamma Communications and Apollo Investment
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gamma and Apollo is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications plc and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment Corp and Gamma Communications 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 Gamma Communications plc are associated (or correlated) with Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of Gamma Communications i.e., Gamma Communications and Apollo Investment go up and down completely randomly.
Pair Corralation between Gamma Communications and Apollo Investment
Assuming the 90 days horizon Gamma Communications plc is expected to generate 1.72 times more return on investment than Apollo Investment. However, Gamma Communications is 1.72 times more volatile than Apollo Investment Corp. It trades about 0.06 of its potential returns per unit of risk. Apollo Investment Corp is currently generating about 0.08 per unit of risk. If you would invest 1,115 in Gamma Communications plc on September 13, 2024 and sell it today you would earn a total of 845.00 from holding Gamma Communications plc or generate 75.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamma Communications plc vs. Apollo Investment Corp
Performance |
| Timeline |
| Gamma Communications plc |
| Apollo Investment Corp |
Gamma Communications and Apollo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Apollo Investment
The main advantage of trading using opposite Gamma Communications and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications position performs unexpectedly, Apollo Investment 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 Apollo Investment will offset losses from the drop in Apollo Investment's long position.| Gamma Communications vs. Lamar Advertising | Gamma Communications vs. CARSALESCOM | Gamma Communications vs. Ribbon Communications | Gamma Communications vs. Charter Communications |
| 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 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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