Correlation Between Apollo Global and Araneta Properties
Can any of the company-specific risk be diversified away by investing in both Apollo Global and Araneta Properties 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 Global and Araneta Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Global Capital and Araneta Properties, you can compare the effects of market volatilities on Apollo Global and Araneta Properties 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 Global with a short position of Araneta Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Global and Araneta Properties.
Diversification Opportunities for Apollo Global and Araneta Properties
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apollo and Araneta is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Capital and Araneta Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Araneta Properties and Apollo Global 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 Global Capital are associated (or correlated) with Araneta Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Araneta Properties has no effect on the direction of Apollo Global i.e., Apollo Global and Araneta Properties go up and down completely randomly.
Pair Corralation between Apollo Global and Araneta Properties
Assuming the 90 days trading horizon Apollo Global Capital is expected to generate 5.45 times more return on investment than Araneta Properties. However, Apollo Global is 5.45 times more volatile than Araneta Properties. It trades about 0.25 of its potential returns per unit of risk. Araneta Properties is currently generating about 0.11 per unit of risk. If you would invest 0.34 in Apollo Global Capital on October 20, 2024 and sell it today you would earn a total of 0.19 from holding Apollo Global Capital or generate 55.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Apollo Global Capital vs. Araneta Properties
Performance |
| Timeline |
| Apollo Global Capital |
| Araneta Properties |
Apollo Global and Araneta Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Global and Araneta Properties
The main advantage of trading using opposite Apollo Global and Araneta Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Global position performs unexpectedly, Araneta Properties 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 Araneta Properties will offset losses from the drop in Araneta Properties' long position.| Apollo Global vs. Nickel Asia Corp | Apollo Global vs. Philex Mining Corp | Apollo Global vs. Atlas Consolidated Mining | Apollo Global vs. Lepanto Consolidated Mining |
| Araneta Properties vs. Metropolitan Bank Trust | Araneta Properties vs. Crown Asia Chemicals | Araneta Properties vs. National Reinsurance | Araneta Properties vs. Prime Media Holdings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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