Correlation Between Apollo Power and Generation Capital
Can any of the company-specific risk be diversified away by investing in both Apollo Power and Generation Capital 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 Power and Generation Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Power and Generation Capital, you can compare the effects of market volatilities on Apollo Power and Generation Capital 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 Power with a short position of Generation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Power and Generation Capital.
Diversification Opportunities for Apollo Power and Generation Capital
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apollo and Generation is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Power and Generation Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Capital and Apollo Power 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 Power are associated (or correlated) with Generation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Capital has no effect on the direction of Apollo Power i.e., Apollo Power and Generation Capital go up and down completely randomly.
Pair Corralation between Apollo Power and Generation Capital
Assuming the 90 days trading horizon Apollo Power is expected to under-perform the Generation Capital. In addition to that, Apollo Power is 1.59 times more volatile than Generation Capital. It trades about -0.26 of its total potential returns per unit of risk. Generation Capital is currently generating about 0.11 per unit of volatility. If you would invest 7,850 in Generation Capital on November 7, 2024 and sell it today you would earn a total of 280.00 from holding Generation Capital or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Power vs. Generation Capital
Performance |
| Timeline |
| Apollo Power |
| Generation Capital |
Apollo Power and Generation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Power and Generation Capital
The main advantage of trading using opposite Apollo Power and Generation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Power position performs unexpectedly, Generation Capital 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 Generation Capital will offset losses from the drop in Generation Capital's long position.| Apollo Power vs. First International Bank | Apollo Power vs. Bank Leumi Le Israel | Apollo Power vs. Israel Discount Bank | Apollo Power vs. Harel Insurance Investments |
| Generation Capital vs. EN Shoham Business | Generation Capital vs. Mivtach Shamir | Generation Capital vs. Enlight Renewable Energy | Generation Capital vs. Rani Zim Shopping |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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