Correlation Between Apollo Global and North American
Can any of the company-specific risk be diversified away by investing in both Apollo Global and North American 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 North American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Global Management and North American Financial, you can compare the effects of market volatilities on Apollo Global and North American 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 North American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Global and North American.
Diversification Opportunities for Apollo Global and North American
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Apollo and North is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and North American Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American Financial 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 Management are associated (or correlated) with North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American Financial has no effect on the direction of Apollo Global i.e., Apollo Global and North American go up and down completely randomly.
Pair Corralation between Apollo Global and North American
Considering the 90-day investment horizon Apollo Global is expected to generate 2.63 times less return on investment than North American. But when comparing it to its historical volatility, Apollo Global Management is 4.95 times less risky than North American. It trades about 0.14 of its potential returns per unit of risk. North American Financial is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 313.00 in North American Financial on August 31, 2024 and sell it today you would earn a total of 229.00 from holding North American Financial or generate 73.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 58.29% |
| Values | Daily Returns |
Apollo Global Management vs. North American Financial
Performance |
| Timeline |
| Apollo Global Management |
| North American Financial |
Apollo Global and North American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Global and North American
The main advantage of trading using opposite Apollo Global and North American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Global position performs unexpectedly, North American 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 North American will offset losses from the drop in North American's long position.| Apollo Global vs. Carlyle Group | Apollo Global vs. Blackstone Group | Apollo Global vs. Brookfield Asset Management | Apollo Global vs. Ares Management LP |
| North American vs. Blackhawk Growth Corp | North American vs. Guardian Capital Group | North American vs. Flow Capital Corp | North American vs. Princeton Capital |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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