Correlation Between Solaer Israel and Apollo Power
Can any of the company-specific risk be diversified away by investing in both Solaer Israel 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 Solaer Israel and Apollo Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solaer Israel and Apollo Power, you can compare the effects of market volatilities on Solaer Israel 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 Solaer Israel with a short position of Apollo Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solaer Israel and Apollo Power.
Diversification Opportunities for Solaer Israel and Apollo Power
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Solaer and Apollo is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Solaer Israel and Apollo Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Power and Solaer Israel 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 Solaer Israel 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 Solaer Israel i.e., Solaer Israel and Apollo Power go up and down completely randomly.
Pair Corralation between Solaer Israel and Apollo Power
Assuming the 90 days trading horizon Solaer Israel is expected to generate 0.49 times more return on investment than Apollo Power. However, Solaer Israel is 2.03 times less risky than Apollo Power. It trades about 0.18 of its potential returns per unit of risk. Apollo Power is currently generating about -0.16 per unit of risk. If you would invest 325,900 in Solaer Israel on September 4, 2024 and sell it today you would earn a total of 33,500 from holding Solaer Israel or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solaer Israel vs. Apollo Power
Performance |
| Timeline |
| Solaer Israel |
| Apollo Power |
Solaer Israel and Apollo Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solaer Israel and Apollo Power
The main advantage of trading using opposite Solaer Israel and Apollo Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solaer Israel 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.| Solaer Israel vs. Tedea Technological Development | Solaer Israel vs. Hiron Trade Investments Industrial | Solaer Israel vs. Veridis Environment | Solaer Israel vs. Iargento Hi Tech |
| Apollo Power vs. Veridis Environment | Apollo Power vs. Sure Tech Investments LP | Apollo Power vs. Abra Information Technologies | Apollo Power vs. Hiron Trade Investments Industrial |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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