Correlation Between Microchip Technology and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both Microchip Technology and Apollo Investment 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 Microchip Technology and Apollo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microchip Technology Incorporated and Apollo Investment Corp, you can compare the effects of market volatilities on Microchip Technology and Apollo Investment 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 Microchip Technology with a short position of Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microchip Technology and Apollo Investment.
Diversification Opportunities for Microchip Technology and Apollo Investment
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microchip and Apollo is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Microchip Technology Incorpora and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment Corp and Microchip Technology 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 Microchip Technology Incorporated are associated (or correlated) with Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of Microchip Technology i.e., Microchip Technology and Apollo Investment go up and down completely randomly.
Pair Corralation between Microchip Technology and Apollo Investment
Assuming the 90 days horizon Microchip Technology Incorporated is expected to under-perform the Apollo Investment. In addition to that, Microchip Technology is 1.67 times more volatile than Apollo Investment Corp. It trades about -0.23 of its total potential returns per unit of risk. Apollo Investment Corp is currently generating about 0.26 per unit of volatility. If you would invest 1,234 in Apollo Investment Corp on August 31, 2024 and sell it today you would earn a total of 95.00 from holding Apollo Investment Corp or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microchip Technology Incorpora vs. Apollo Investment Corp
Performance |
| Timeline |
| Microchip Technology |
| Apollo Investment Corp |
Microchip Technology and Apollo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microchip Technology and Apollo Investment
The main advantage of trading using opposite Microchip Technology and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microchip Technology position performs unexpectedly, Apollo Investment 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 Investment will offset losses from the drop in Apollo Investment's long position.| Microchip Technology vs. Siamgas And Petrochemicals | Microchip Technology vs. ULTRA CLEAN HLDGS | Microchip Technology vs. Datang International Power | Microchip Technology vs. Ultra Clean Holdings |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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