Correlation Between Apollo Global and Saratoga Investment
Can any of the company-specific risk be diversified away by investing in both Apollo Global and Saratoga Investment 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 Saratoga Investment 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 Saratoga Investment Corp, you can compare the effects of market volatilities on Apollo Global and Saratoga Investment 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 Saratoga Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Global and Saratoga Investment.
Diversification Opportunities for Apollo Global and Saratoga Investment
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apollo and Saratoga is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Saratoga Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saratoga Investment Corp 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 Saratoga Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saratoga Investment Corp has no effect on the direction of Apollo Global i.e., Apollo Global and Saratoga Investment go up and down completely randomly.
Pair Corralation between Apollo Global and Saratoga Investment
Considering the 90-day investment horizon Apollo Global Management is expected to generate 2.78 times more return on investment than Saratoga Investment. However, Apollo Global is 2.78 times more volatile than Saratoga Investment Corp. It trades about 0.36 of its potential returns per unit of risk. Saratoga Investment Corp is currently generating about 0.39 per unit of risk. If you would invest 13,904 in Apollo Global Management on September 4, 2024 and sell it today you would earn a total of 3,330 from holding Apollo Global Management or generate 23.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Global Management vs. Saratoga Investment Corp
Performance |
| Timeline |
| Apollo Global Management |
| Saratoga Investment Corp |
Apollo Global and Saratoga Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Global and Saratoga Investment
The main advantage of trading using opposite Apollo Global and Saratoga Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Global position performs unexpectedly, Saratoga Investment 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 Saratoga Investment will offset losses from the drop in Saratoga Investment'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 |
| Saratoga Investment vs. New Mountain Finance | Saratoga Investment vs. BlackRock TCP Capital | Saratoga Investment vs. Carlyle Secured Lending | Saratoga Investment vs. Sixth Street Specialty |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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