Correlation Between Apollo Global and Two Harbors
Can any of the company-specific risk be diversified away by investing in both Apollo Global and Two Harbors 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 Two Harbors 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 Two Harbors Investments, you can compare the effects of market volatilities on Apollo Global and Two Harbors 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 Two Harbors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Global and Two Harbors.
Diversification Opportunities for Apollo Global and Two Harbors
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Apollo and Two is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Two Harbors Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Two Harbors Investments 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 Two Harbors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Two Harbors Investments has no effect on the direction of Apollo Global i.e., Apollo Global and Two Harbors go up and down completely randomly.
Pair Corralation between Apollo Global and Two Harbors
Considering the 90-day investment horizon Apollo Global Management is expected to under-perform the Two Harbors. In addition to that, Apollo Global is 1.01 times more volatile than Two Harbors Investments. It trades about -0.08 of its total potential returns per unit of risk. Two Harbors Investments is currently generating about 0.25 per unit of volatility. If you would invest 1,156 in Two Harbors Investments on November 6, 2024 and sell it today you would earn a total of 109.00 from holding Two Harbors Investments or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Apollo Global Management vs. Two Harbors Investments
Performance |
| Timeline |
| Apollo Global Management |
| Two Harbors Investments |
Apollo Global and Two Harbors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Global and Two Harbors
The main advantage of trading using opposite Apollo Global and Two Harbors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Global position performs unexpectedly, Two Harbors 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 Two Harbors will offset losses from the drop in Two Harbors' long position.| Apollo Global vs. Carlyle Group | Apollo Global vs. Blackstone Group | Apollo Global vs. Brookfield Asset Management | Apollo Global vs. Ares Management LP |
| Two Harbors vs. New York Mortgage | Two Harbors vs. ARMOUR Residential REIT | Two Harbors vs. Annaly Capital Management | Two Harbors vs. AGNC Investment Corp |
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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