Correlation Between Apollo Global and NNRF

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Can any of the company-specific risk be diversified away by investing in both Apollo Global and NNRF 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 NNRF 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 NNRF Inc, you can compare the effects of market volatilities on Apollo Global and NNRF 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 NNRF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Global and NNRF.

Diversification Opportunities for Apollo Global and NNRF

-0.06
  Correlation Coefficient

Good diversification

The 3 months correlation between Apollo and NNRF is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and NNRF Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NNRF Inc 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 NNRF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NNRF Inc has no effect on the direction of Apollo Global i.e., Apollo Global and NNRF go up and down completely randomly.

Pair Corralation between Apollo Global and NNRF

Considering the 90-day investment horizon Apollo Global is expected to generate 4.91 times less return on investment than NNRF. But when comparing it to its historical volatility, Apollo Global Management is 8.46 times less risky than NNRF. It trades about 0.11 of its potential returns per unit of risk. NNRF Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.38  in NNRF Inc on August 27, 2024 and sell it today you would lose (0.15) from holding NNRF Inc or give up 39.47% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Apollo Global Management  vs.  NNRF Inc

 Performance 
       Timeline  
Apollo Global Management 

Risk-Adjusted Performance

23 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Management are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Apollo Global displayed solid returns over the last few months and may actually be approaching a breakup point.
NNRF Inc 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in NNRF Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, NNRF demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Apollo Global and NNRF Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apollo Global and NNRF

The main advantage of trading using opposite Apollo Global and NNRF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Global position performs unexpectedly, NNRF 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 NNRF will offset losses from the drop in NNRF's long position.
The idea behind Apollo Global Management and NNRF Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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