Correlation Between Norstar and Apollo Power
Can any of the company-specific risk be diversified away by investing in both Norstar and Apollo Power 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 Norstar and Apollo Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norstar and Apollo Power, you can compare the effects of market volatilities on Norstar and Apollo Power 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 Norstar with a short position of Apollo Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norstar and Apollo Power.
Diversification Opportunities for Norstar and Apollo Power
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Norstar and Apollo is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Norstar and Apollo Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Power and Norstar 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 Norstar are associated (or correlated) with Apollo Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Power has no effect on the direction of Norstar i.e., Norstar and Apollo Power go up and down completely randomly.
Pair Corralation between Norstar and Apollo Power
Assuming the 90 days trading horizon Norstar is expected to generate 0.9 times more return on investment than Apollo Power. However, Norstar is 1.11 times less risky than Apollo Power. It trades about 0.38 of its potential returns per unit of risk. Apollo Power is currently generating about -0.74 per unit of risk. If you would invest 110,500 in Norstar on August 28, 2024 and sell it today you would earn a total of 29,500 from holding Norstar or generate 26.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norstar vs. Apollo Power
Performance |
| Timeline |
| Norstar |
| Apollo Power |
Norstar and Apollo Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norstar and Apollo Power
The main advantage of trading using opposite Norstar and Apollo Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norstar position performs unexpectedly, Apollo Power 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 Power will offset losses from the drop in Apollo Power's long position.| Norstar vs. Israel Canada | Norstar vs. Delek Group | Norstar vs. Shikun Binui | Norstar vs. Israel Discount Bank |
| Apollo Power vs. Retailors | Apollo Power vs. Batm Advanced Communications | Apollo Power vs. Clal Biotechnology Industries | Apollo Power vs. Golan Plastic |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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