Correlation Between Rithm Capital and Apollo Commercial
Can any of the company-specific risk be diversified away by investing in both Rithm 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 Rithm 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 Rithm Capital Corp and Apollo Commercial Real, you can compare the effects of market volatilities on Rithm 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 Rithm Capital with a short position of Apollo Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rithm Capital and Apollo Commercial.
Diversification Opportunities for Rithm Capital and Apollo Commercial
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rithm and Apollo is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Rithm 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 Rithm 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 Rithm 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 Rithm Capital i.e., Rithm Capital and Apollo Commercial go up and down completely randomly.
Pair Corralation between Rithm Capital and Apollo Commercial
Assuming the 90 days trading horizon Rithm Capital is expected to generate 13.76 times less return on investment than Apollo Commercial. But when comparing it to its historical volatility, Rithm Capital Corp is 4.65 times less risky than Apollo Commercial. It trades about 0.07 of its potential returns per unit of risk. Apollo Commercial Real is currently generating about 0.2 of returns per unit of risk over similar time horizon. 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rithm Capital Corp vs. Apollo Commercial Real
Performance |
| Timeline |
| Rithm Capital Corp |
| Apollo Commercial Real |
Rithm Capital and Apollo Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rithm Capital and Apollo Commercial
The main advantage of trading using opposite Rithm Capital and Apollo Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rithm 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.The idea behind Rithm Capital Corp and Apollo Commercial Real 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.| 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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