Correlation Between Apollo Bancorp and Woodlands Financial
Can any of the company-specific risk be diversified away by investing in both Apollo Bancorp and Woodlands Financial 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 Bancorp and Woodlands Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Bancorp and Woodlands Financial Services, you can compare the effects of market volatilities on Apollo Bancorp and Woodlands Financial 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 Bancorp with a short position of Woodlands Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Bancorp and Woodlands Financial.
Diversification Opportunities for Apollo Bancorp and Woodlands Financial
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apollo and Woodlands is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Bancorp and Woodlands Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodlands Financial and Apollo Bancorp 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 Bancorp are associated (or correlated) with Woodlands Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodlands Financial has no effect on the direction of Apollo Bancorp i.e., Apollo Bancorp and Woodlands Financial go up and down completely randomly.
Pair Corralation between Apollo Bancorp and Woodlands Financial
Given the investment horizon of 90 days Apollo Bancorp is expected to generate 2.56 times less return on investment than Woodlands Financial. But when comparing it to its historical volatility, Apollo Bancorp is 1.65 times less risky than Woodlands Financial. It trades about 0.02 of its potential returns per unit of risk. Woodlands Financial Services is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,943 in Woodlands Financial Services on August 29, 2024 and sell it today you would earn a total of 72.00 from holding Woodlands Financial Services or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Apollo Bancorp vs. Woodlands Financial Services
Performance |
| Timeline |
| Apollo Bancorp |
| Woodlands Financial |
Apollo Bancorp and Woodlands Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Bancorp and Woodlands Financial
The main advantage of trading using opposite Apollo Bancorp and Woodlands Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Bancorp position performs unexpectedly, Woodlands Financial 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 Woodlands Financial will offset losses from the drop in Woodlands Financial's long position.| Apollo Bancorp vs. The Farmers Bank | Apollo Bancorp vs. Bank of Utica | Apollo Bancorp vs. Delhi Bank Corp | Apollo Bancorp vs. CCSB Financial Corp |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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