Correlation Between Hollywood Bowl and Apollo Investment

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Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl 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 Hollywood Bowl and Apollo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hollywood Bowl Group and Apollo Investment Corp, you can compare the effects of market volatilities on Hollywood Bowl 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 Hollywood Bowl with a short position of Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Apollo Investment.

Diversification Opportunities for Hollywood Bowl and Apollo Investment

-0.25
  Correlation Coefficient

Very good diversification

The 3 months correlation between Hollywood and Apollo is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group 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 Hollywood Bowl 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 Hollywood Bowl Group 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 Hollywood Bowl i.e., Hollywood Bowl and Apollo Investment go up and down completely randomly.

Pair Corralation between Hollywood Bowl and Apollo Investment

Assuming the 90 days horizon Hollywood Bowl Group is expected to under-perform the Apollo Investment. In addition to that, Hollywood Bowl is 1.58 times more volatile than Apollo Investment Corp. It trades about -0.2 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  1,286  in Apollo Investment Corp on October 22, 2024 and sell it today you would earn a total of  17.00  from holding Apollo Investment Corp or generate 1.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Hollywood Bowl Group  vs.  Apollo Investment Corp

 Performance 
       Timeline  
Hollywood Bowl Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hollywood Bowl Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Apollo Investment Corp 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Investment Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Apollo Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Hollywood Bowl and Apollo Investment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hollywood Bowl and Apollo Investment

The main advantage of trading using opposite Hollywood Bowl and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl 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 Hollywood Bowl Group 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.
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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