Correlation Between Apollo Commercial and Claros Mortgage
Can any of the company-specific risk be diversified away by investing in both Apollo Commercial and Claros Mortgage 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 Claros Mortgage 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 Claros Mortgage Trust, you can compare the effects of market volatilities on Apollo Commercial and Claros Mortgage 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 Claros Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Commercial and Claros Mortgage.
Diversification Opportunities for Apollo Commercial and Claros Mortgage
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apollo and Claros is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Commercial Real and Claros Mortgage Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claros Mortgage Trust 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 Claros Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claros Mortgage Trust has no effect on the direction of Apollo Commercial i.e., Apollo Commercial and Claros Mortgage go up and down completely randomly.
Pair Corralation between Apollo Commercial and Claros Mortgage
Considering the 90-day investment horizon Apollo Commercial is expected to generate 2.72 times less return on investment than Claros Mortgage. But when comparing it to its historical volatility, Apollo Commercial Real is 3.87 times less risky than Claros Mortgage. It trades about 0.2 of its potential returns per unit of risk. Claros Mortgage Trust is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 634.00 in Claros Mortgage Trust on August 27, 2024 and sell it today you would earn a total of 70.00 from holding Claros Mortgage Trust or generate 11.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Commercial Real vs. Claros Mortgage Trust
Performance |
| Timeline |
| Apollo Commercial Real |
| Claros Mortgage Trust |
Apollo Commercial and Claros Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Commercial and Claros Mortgage
The main advantage of trading using opposite Apollo Commercial and Claros Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Commercial position performs unexpectedly, Claros Mortgage 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 Claros Mortgage will offset losses from the drop in Claros Mortgage's long position.| Apollo Commercial vs. Blackstone Mortgage Trust | Apollo Commercial vs. Omega Healthcare Investors | Apollo Commercial vs. Medical Properties Trust |
| Claros Mortgage vs. Ladder Capital Corp | Claros Mortgage vs. Invesco Mortgage Capital | Claros Mortgage vs. AGNC Investment Corp | Claros Mortgage vs. Invesco Mortgage Capital |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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