Correlation Between Diamond Hill and Apollo Global
Can any of the company-specific risk be diversified away by investing in both Diamond Hill 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 Diamond Hill and Apollo Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Hill Investment and Apollo Global Management, you can compare the effects of market volatilities on Diamond Hill 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 Diamond Hill with a short position of Apollo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and Apollo Global.
Diversification Opportunities for Diamond Hill and Apollo Global
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Diamond and Apollo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Investment 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 Diamond Hill 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 Diamond Hill Investment 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 Diamond Hill i.e., Diamond Hill and Apollo Global go up and down completely randomly.
Pair Corralation between Diamond Hill and Apollo Global
Given the investment horizon of 90 days Diamond Hill is expected to generate 2.06 times less return on investment than Apollo Global. But when comparing it to its historical volatility, Diamond Hill Investment is 1.49 times less risky than Apollo Global. It trades about 0.22 of its potential returns per unit of risk. Apollo Global Management is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 14,443 in Apollo Global Management on August 27, 2024 and sell it today you would earn a total of 3,027 from holding Apollo Global Management or generate 20.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Hill Investment vs. Apollo Global Management
Performance |
| Timeline |
| Diamond Hill Investment |
| Apollo Global Management |
Diamond Hill and Apollo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and Apollo Global
The main advantage of trading using opposite Diamond Hill and Apollo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill 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.| Diamond Hill vs. Federated Premier Municipal | Diamond Hill vs. Blackrock Muniyield | Diamond Hill vs. NXG NextGen Infrastructure | Diamond Hill vs. Federated Investors B |
| Apollo Global vs. PowerUp Acquisition Corp | Apollo Global vs. Aurora Innovation | Apollo Global vs. HUMANA INC | Apollo Global vs. Aquagold International |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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