Correlation Between CF Acquisition and Apollo Global
Can any of the company-specific risk be diversified away by investing in both CF Acquisition 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 CF Acquisition and Apollo Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Acquisition VII and Apollo Global Management, you can compare the effects of market volatilities on CF Acquisition 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 CF Acquisition with a short position of Apollo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Acquisition and Apollo Global.
Diversification Opportunities for CF Acquisition and Apollo Global
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CFFS and Apollo is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding CF Acquisition VII 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 CF Acquisition 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 CF Acquisition VII 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 CF Acquisition i.e., CF Acquisition and Apollo Global go up and down completely randomly.
Pair Corralation between CF Acquisition and Apollo Global
Given the investment horizon of 90 days CF Acquisition is expected to generate 13.78 times less return on investment than Apollo Global. But when comparing it to its historical volatility, CF Acquisition VII is 7.88 times less risky than Apollo Global. It trades about 0.08 of its potential returns per unit of risk. Apollo Global Management is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7,181 in Apollo Global Management on September 2, 2024 and sell it today you would earn a total of 10,322 from holding Apollo Global Management or generate 143.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CF Acquisition VII vs. Apollo Global Management
Performance |
| Timeline |
| CF Acquisition VII |
| Apollo Global Management |
CF Acquisition and Apollo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Acquisition and Apollo Global
The main advantage of trading using opposite CF Acquisition and Apollo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Acquisition 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.The idea behind CF Acquisition VII and Apollo Global Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Apollo Global vs. Carlyle Group | Apollo Global vs. Blackstone Group | Apollo Global vs. Brookfield Asset Management | Apollo Global vs. Ares Management LP |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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