Correlation Between SPORTING and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both SPORTING 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 SPORTING and Apollo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORTING and Apollo Investment Corp, you can compare the effects of market volatilities on SPORTING 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 SPORTING with a short position of Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORTING and Apollo Investment.
Diversification Opportunities for SPORTING and Apollo Investment
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPORTING and Apollo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING 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 SPORTING 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 SPORTING 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 SPORTING i.e., SPORTING and Apollo Investment go up and down completely randomly.
Pair Corralation between SPORTING and Apollo Investment
Assuming the 90 days trading horizon SPORTING is expected to generate 1.22 times less return on investment than Apollo Investment. In addition to that, SPORTING is 1.73 times more volatile than Apollo Investment Corp. It trades about 0.03 of its total potential returns per unit of risk. Apollo Investment Corp is currently generating about 0.06 per unit of volatility. If you would invest 1,073 in Apollo Investment Corp on August 27, 2024 and sell it today you would earn a total of 245.00 from holding Apollo Investment Corp or generate 22.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORTING vs. Apollo Investment Corp
Performance |
| Timeline |
| SPORTING |
| Apollo Investment Corp |
SPORTING and Apollo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORTING and Apollo Investment
The main advantage of trading using opposite SPORTING and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING 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.The idea behind SPORTING and Apollo Investment Corp 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 Investment vs. Macquarie Group Limited | Apollo Investment vs. MSCI Inc | Apollo Investment vs. Superior Plus Corp | Apollo Investment vs. NMI Holdings |
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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