Correlation Between Ladder Capital and Apollo Commercial
Can any of the company-specific risk be diversified away by investing in both Ladder Capital and Apollo Commercial 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 Ladder Capital and Apollo Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ladder Capital Corp and Apollo Commercial Real, you can compare the effects of market volatilities on Ladder Capital and Apollo Commercial 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 Ladder Capital with a short position of Apollo Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ladder Capital and Apollo Commercial.
Diversification Opportunities for Ladder Capital and Apollo Commercial
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ladder and Apollo is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ladder Capital Corp and Apollo Commercial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Commercial Real and Ladder Capital 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 Ladder Capital Corp are associated (or correlated) with Apollo Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Commercial Real has no effect on the direction of Ladder Capital i.e., Ladder Capital and Apollo Commercial go up and down completely randomly.
Pair Corralation between Ladder Capital and Apollo Commercial
Given the investment horizon of 90 days Ladder Capital is expected to generate 1.14 times less return on investment than Apollo Commercial. In addition to that, Ladder Capital is 1.13 times more volatile than Apollo Commercial Real. It trades about 0.16 of its total potential returns per unit of risk. Apollo Commercial Real is currently generating about 0.2 per unit of volatility. If you would invest 885.00 in Apollo Commercial Real on August 27, 2024 and sell it today you would earn a total of 39.00 from holding Apollo Commercial Real or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ladder Capital Corp vs. Apollo Commercial Real
Performance |
| Timeline |
| Ladder Capital Corp |
| Apollo Commercial Real |
Ladder Capital and Apollo Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ladder Capital and Apollo Commercial
The main advantage of trading using opposite Ladder Capital and Apollo Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ladder Capital position performs unexpectedly, Apollo Commercial 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 Commercial will offset losses from the drop in Apollo Commercial's long position.| Ladder Capital vs. KKR Real Estate | Ladder Capital vs. Ares Commercial Real | Ladder Capital vs. Ellington Residential Mortgage | Ladder Capital vs. Claros Mortgage Trust |
| Apollo Commercial vs. Blackstone Mortgage Trust | Apollo Commercial vs. Omega Healthcare Investors | Apollo Commercial vs. Medical Properties Trust |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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