Correlation Between Apollo Commercial and Broadmark Realty
Can any of the company-specific risk be diversified away by investing in both Apollo Commercial and Broadmark Realty 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 Commercial and Broadmark Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Commercial Real and Broadmark Realty Capital, you can compare the effects of market volatilities on Apollo Commercial and Broadmark Realty 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 Commercial with a short position of Broadmark Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Commercial and Broadmark Realty.
Diversification Opportunities for Apollo Commercial and Broadmark Realty
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apollo and Broadmark is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Commercial Real and Broadmark Realty Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadmark Realty Capital and Apollo Commercial 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 Commercial Real are associated (or correlated) with Broadmark Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadmark Realty Capital has no effect on the direction of Apollo Commercial i.e., Apollo Commercial and Broadmark Realty go up and down completely randomly.
Pair Corralation between Apollo Commercial and Broadmark Realty
Considering the 90-day investment horizon Apollo Commercial is expected to generate 9.07 times less return on investment than Broadmark Realty. But when comparing it to its historical volatility, Apollo Commercial Real is 1.39 times less risky than Broadmark Realty. It trades about 0.02 of its potential returns per unit of risk. Broadmark Realty Capital is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 360.00 in Broadmark Realty Capital on August 27, 2024 and sell it today you would earn a total of 122.00 from holding Broadmark Realty Capital or generate 33.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 24.8% |
| Values | Daily Returns |
Apollo Commercial Real vs. Broadmark Realty Capital
Performance |
| Timeline |
| Apollo Commercial Real |
| Broadmark Realty Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Apollo Commercial and Broadmark Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Commercial and Broadmark Realty
The main advantage of trading using opposite Apollo Commercial and Broadmark Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Commercial position performs unexpectedly, Broadmark Realty 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 Broadmark Realty will offset losses from the drop in Broadmark Realty's long position.| Apollo Commercial vs. Blackstone Mortgage Trust | Apollo Commercial vs. Omega Healthcare Investors | Apollo Commercial vs. Medical Properties Trust |
| Broadmark Realty vs. Two Harbors Investments | Broadmark Realty vs. Ares Commercial Real | Broadmark Realty vs. Apollo Commercial Real | Broadmark Realty vs. Ellington Financial |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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