Correlation Between Ares Commercial and Apollo Commercial
Can any of the company-specific risk be diversified away by investing in both Ares Commercial and Apollo Commercial 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 Ares Commercial and Apollo Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Commercial Real and Apollo Commercial Real, you can compare the effects of market volatilities on Ares Commercial and Apollo Commercial 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 Ares Commercial with a short position of Apollo Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Commercial and Apollo Commercial.
Diversification Opportunities for Ares Commercial and Apollo Commercial
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ares and Apollo is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ares Commercial Real and Apollo Commercial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Commercial Real and Ares Commercial 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 Ares Commercial Real are associated (or correlated) with Apollo Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Commercial Real has no effect on the direction of Ares Commercial i.e., Ares Commercial and Apollo Commercial go up and down completely randomly.
Pair Corralation between Ares Commercial and Apollo Commercial
Given the investment horizon of 90 days Ares Commercial Real is expected to generate 1.46 times more return on investment than Apollo Commercial. However, Ares Commercial is 1.46 times more volatile than Apollo Commercial Real. It trades about 0.07 of its potential returns per unit of risk. Apollo Commercial Real is currently generating about 0.0 per unit of risk. If you would invest 607.00 in Ares Commercial Real on August 24, 2024 and sell it today you would earn a total of 109.00 from holding Ares Commercial Real or generate 17.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Ares Commercial Real vs. Apollo Commercial Real
Performance |
| Timeline |
| Ares Commercial Real |
| Apollo Commercial Real |
Ares Commercial and Apollo Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Commercial and Apollo Commercial
The main advantage of trading using opposite Ares Commercial and Apollo Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Commercial position performs unexpectedly, Apollo Commercial 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 Commercial will offset losses from the drop in Apollo Commercial's long position.| Ares Commercial vs. Two Harbors Investments | Ares Commercial vs. Apollo Commercial Real | Ares Commercial vs. Ellington Financial | Ares Commercial vs. Dynex Capital |
| Apollo Commercial vs. Lument Finance Trust | Apollo Commercial vs. AG Mortgage Investment | Apollo Commercial vs. Rithm Capital Corp | Apollo Commercial vs. Cherry Hill Mortgage |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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