Correlation Between Apollo Global and Northern Trust
Can any of the company-specific risk be diversified away by investing in both Apollo Global and Northern Trust 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 Northern Trust 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 Northern Trust, you can compare the effects of market volatilities on Apollo Global and Northern Trust 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 Northern Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Global and Northern Trust.
Diversification Opportunities for Apollo Global and Northern Trust
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Apollo and Northern is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Northern Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Trust 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 Northern Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Trust has no effect on the direction of Apollo Global i.e., Apollo Global and Northern Trust go up and down completely randomly.
Pair Corralation between Apollo Global and Northern Trust
Considering the 90-day investment horizon Apollo Global Management is expected to generate 1.11 times more return on investment than Northern Trust. However, Apollo Global is 1.11 times more volatile than Northern Trust. It trades about 0.11 of its potential returns per unit of risk. Northern Trust is currently generating about 0.04 per unit of risk. If you would invest 6,091 in Apollo Global Management on August 27, 2024 and sell it today you would earn a total of 10,665 from holding Apollo Global Management or generate 175.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Global Management vs. Northern Trust
Performance |
| Timeline |
| Apollo Global Management |
| Northern Trust |
Apollo Global and Northern Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Global and Northern Trust
The main advantage of trading using opposite Apollo Global and Northern Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Global position performs unexpectedly, Northern Trust 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 Northern Trust will offset losses from the drop in Northern Trust's long position.| Apollo Global vs. PowerUp Acquisition Corp | Apollo Global vs. Aurora Innovation | Apollo Global vs. HUMANA INC | Apollo Global vs. Aquagold International |
| Northern Trust vs. PowerUp Acquisition Corp | Northern Trust vs. Aurora Innovation | Northern Trust vs. HUMANA INC | Northern Trust vs. Aquagold International |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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