Correlation Between CHINA HUARONG and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both CHINA HUARONG 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 CHINA HUARONG and Apollo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA HUARONG ENERHD 50 and Apollo Investment Corp, you can compare the effects of market volatilities on CHINA HUARONG 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 CHINA HUARONG with a short position of Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA HUARONG and Apollo Investment.
Diversification Opportunities for CHINA HUARONG and Apollo Investment
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CHINA and Apollo is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CHINA HUARONG ENERHD 50 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 CHINA HUARONG 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 CHINA HUARONG ENERHD 50 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 CHINA HUARONG i.e., CHINA HUARONG and Apollo Investment go up and down completely randomly.
Pair Corralation between CHINA HUARONG and Apollo Investment
Assuming the 90 days trading horizon CHINA HUARONG ENERHD 50 is expected to generate 22.38 times more return on investment than Apollo Investment. However, CHINA HUARONG is 22.38 times more volatile than Apollo Investment Corp. It trades about 0.09 of its potential returns per unit of risk. Apollo Investment Corp is currently generating about 0.0 per unit of risk. If you would invest 0.20 in CHINA HUARONG ENERHD 50 on September 13, 2024 and sell it today you would lose (0.05) from holding CHINA HUARONG ENERHD 50 or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA HUARONG ENERHD 50 vs. Apollo Investment Corp
Performance |
| Timeline |
| CHINA HUARONG ENERHD |
| Apollo Investment Corp |
CHINA HUARONG and Apollo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA HUARONG and Apollo Investment
The main advantage of trading using opposite CHINA HUARONG and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA HUARONG 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.| CHINA HUARONG vs. WILLIS LEASE FIN | CHINA HUARONG vs. SAFETY MEDICAL PROD | CHINA HUARONG vs. AVITA Medical | CHINA HUARONG vs. CarsalesCom |
| Apollo Investment vs. Superior Plus Corp | Apollo Investment vs. SIVERS SEMICONDUCTORS AB | Apollo Investment vs. CHINA HUARONG ENERHD 50 | Apollo Investment vs. NORDIC HALIBUT AS |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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