Correlation Between Apollo Commercial and Starwood Property
Can any of the company-specific risk be diversified away by investing in both Apollo Commercial and Starwood Property 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 Starwood Property 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 Starwood Property Trust, you can compare the effects of market volatilities on Apollo Commercial and Starwood Property 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 Starwood Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Commercial and Starwood Property.
Diversification Opportunities for Apollo Commercial and Starwood Property
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apollo and Starwood is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Commercial Real and Starwood Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starwood Property 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 Starwood Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starwood Property Trust has no effect on the direction of Apollo Commercial i.e., Apollo Commercial and Starwood Property go up and down completely randomly.
Pair Corralation between Apollo Commercial and Starwood Property
Considering the 90-day investment horizon Apollo Commercial is expected to generate 1.87 times less return on investment than Starwood Property. In addition to that, Apollo Commercial is 1.21 times more volatile than Starwood Property Trust. It trades about 0.01 of its total potential returns per unit of risk. Starwood Property Trust is currently generating about 0.03 per unit of volatility. If you would invest 1,668 in Starwood Property Trust on August 24, 2024 and sell it today you would earn a total of 323.00 from holding Starwood Property Trust or generate 19.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Commercial Real vs. Starwood Property Trust
Performance |
| Timeline |
| Apollo Commercial Real |
| Starwood Property Trust |
Apollo Commercial and Starwood Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Commercial and Starwood Property
The main advantage of trading using opposite Apollo Commercial and Starwood Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Commercial position performs unexpectedly, Starwood Property 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 Starwood Property will offset losses from the drop in Starwood Property's long position.| Apollo Commercial vs. Lument Finance Trust | Apollo Commercial vs. AG Mortgage Investment | Apollo Commercial vs. Rithm Capital Corp | Apollo Commercial vs. Cherry Hill Mortgage |
| Starwood Property vs. Blackstone Mortgage Trust | Starwood Property vs. Arbor Realty Trust | Starwood Property vs. Apollo Commercial Real | Starwood Property vs. Omega Healthcare Investors |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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