Correlation Between Apollo Power and Plaza Centers
Can any of the company-specific risk be diversified away by investing in both Apollo Power and Plaza Centers 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 Plaza Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Power and Plaza Centers NV, you can compare the effects of market volatilities on Apollo Power and Plaza Centers 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 Plaza Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Power and Plaza Centers.
Diversification Opportunities for Apollo Power and Plaza Centers
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Apollo and Plaza is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Power and Plaza Centers NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Centers NV 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 Plaza Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Centers NV has no effect on the direction of Apollo Power i.e., Apollo Power and Plaza Centers go up and down completely randomly.
Pair Corralation between Apollo Power and Plaza Centers
Assuming the 90 days trading horizon Apollo Power is expected to under-perform the Plaza Centers. But the stock apears to be less risky and, when comparing its historical volatility, Apollo Power is 1.92 times less risky than Plaza Centers. The stock trades about -0.1 of its potential returns per unit of risk. The Plaza Centers NV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 16,840 in Plaza Centers NV on August 31, 2024 and sell it today you would earn a total of 3,380 from holding Plaza Centers NV or generate 20.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.66% |
| Values | Daily Returns |
Apollo Power vs. Plaza Centers NV
Performance |
| Timeline |
| Apollo Power |
| Plaza Centers NV |
Apollo Power and Plaza Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Power and Plaza Centers
The main advantage of trading using opposite Apollo Power and Plaza Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Power position performs unexpectedly, Plaza Centers 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 Plaza Centers will offset losses from the drop in Plaza Centers' long position.| Apollo Power vs. Libra Insurance | Apollo Power vs. RSL Electronics | Apollo Power vs. Polyram Plastic Industries | Apollo Power vs. Clal Insurance Enterprises |
| Plaza Centers vs. Menif Financial Services | Plaza Centers vs. Harel Insurance Investments | Plaza Centers vs. Altshuler Shaham Financial | Plaza Centers vs. MEITAV INVESTMENTS HOUSE |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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