Correlation Between Tesla and Apollo Bancorp
Can any of the company-specific risk be diversified away by investing in both Tesla and Apollo Bancorp 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 Tesla and Apollo Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and Apollo Bancorp, you can compare the effects of market volatilities on Tesla and Apollo Bancorp 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 Tesla with a short position of Apollo Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Apollo Bancorp.
Diversification Opportunities for Tesla and Apollo Bancorp
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tesla and Apollo is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Apollo Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Bancorp and Tesla 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 Tesla Inc are associated (or correlated) with Apollo Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Bancorp has no effect on the direction of Tesla i.e., Tesla and Apollo Bancorp go up and down completely randomly.
Pair Corralation between Tesla and Apollo Bancorp
Given the investment horizon of 90 days Tesla Inc is expected to under-perform the Apollo Bancorp. In addition to that, Tesla is 2.84 times more volatile than Apollo Bancorp. It trades about -0.04 of its total potential returns per unit of risk. Apollo Bancorp is currently generating about 0.14 per unit of volatility. If you would invest 3,400 in Apollo Bancorp on November 1, 2024 and sell it today you would earn a total of 115.00 from holding Apollo Bancorp or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. Apollo Bancorp
Performance |
| Timeline |
| Tesla Inc |
| Apollo Bancorp |
Tesla and Apollo Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Apollo Bancorp
The main advantage of trading using opposite Tesla and Apollo Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Apollo Bancorp 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 Bancorp will offset losses from the drop in Apollo Bancorp's long position.The idea behind Tesla Inc and Apollo Bancorp 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 Bancorp vs. The Farmers Bank | Apollo Bancorp vs. Bank of Utica | Apollo Bancorp vs. Delhi Bank Corp | Apollo Bancorp vs. CCSB Financial Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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