Correlation Between American Express and Apollo Global
Can any of the company-specific risk be diversified away by investing in both American Express and Apollo Global 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 American Express and Apollo Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Apollo Global Management, you can compare the effects of market volatilities on American Express and Apollo Global 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 American Express with a short position of Apollo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Apollo Global.
Diversification Opportunities for American Express and Apollo Global
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Apollo is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Apollo Global Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Global Management and American Express 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 American Express are associated (or correlated) with Apollo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Global Management has no effect on the direction of American Express i.e., American Express and Apollo Global go up and down completely randomly.
Pair Corralation between American Express and Apollo Global
Considering the 90-day investment horizon American Express is expected to generate 1.64 times less return on investment than Apollo Global. But when comparing it to its historical volatility, American Express is 1.43 times less risky than Apollo Global. It trades about 0.13 of its potential returns per unit of risk. Apollo Global Management is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 11,574 in Apollo Global Management on September 1, 2024 and sell it today you would earn a total of 5,929 from holding Apollo Global Management or generate 51.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Apollo Global Management
Performance |
| Timeline |
| American Express |
| Apollo Global Management |
American Express and Apollo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Apollo Global
The main advantage of trading using opposite American Express and Apollo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Apollo Global 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 Apollo Global will offset losses from the drop in Apollo Global's long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| Apollo Global vs. Visa Class A | Apollo Global vs. Diamond Hill Investment | Apollo Global vs. Distoken Acquisition | Apollo Global vs. Associated Capital Group |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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