Correlation Between GM and Apollo Strategic
Can any of the company-specific risk be diversified away by investing in both GM and Apollo Strategic 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 GM and Apollo Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Apollo Strategic Growth, you can compare the effects of market volatilities on GM and Apollo Strategic 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 GM with a short position of Apollo Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Apollo Strategic.
Diversification Opportunities for GM and Apollo Strategic
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and Apollo is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Apollo Strategic Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Strategic Growth and GM 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 General Motors are associated (or correlated) with Apollo Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Strategic Growth has no effect on the direction of GM i.e., GM and Apollo Strategic go up and down completely randomly.
Pair Corralation between GM and Apollo Strategic
If you would invest 4,539 in General Motors on September 3, 2024 and sell it today you would earn a total of 965.00 from holding General Motors or generate 21.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.8% |
| Values | Daily Returns |
General Motors vs. Apollo Strategic Growth
Performance |
| Timeline |
| General Motors |
| Apollo Strategic Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Apollo Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Apollo Strategic
The main advantage of trading using opposite GM and Apollo Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Apollo Strategic 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 Strategic will offset losses from the drop in Apollo Strategic's long position.The idea behind General Motors and Apollo Strategic Growth 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.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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