Correlation Between Apollo Medical and WisdomTree Investments
Can any of the company-specific risk be diversified away by investing in both Apollo Medical and WisdomTree Investments 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 Apollo Medical and WisdomTree Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Medical Holdings and WisdomTree Investments, you can compare the effects of market volatilities on Apollo Medical and WisdomTree Investments 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 Apollo Medical with a short position of WisdomTree Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Medical and WisdomTree Investments.
Diversification Opportunities for Apollo Medical and WisdomTree Investments
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apollo and WisdomTree is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical Holdings and WisdomTree Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Investments and Apollo Medical 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 Apollo Medical Holdings are associated (or correlated) with WisdomTree Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Investments has no effect on the direction of Apollo Medical i.e., Apollo Medical and WisdomTree Investments go up and down completely randomly.
Pair Corralation between Apollo Medical and WisdomTree Investments
Assuming the 90 days horizon Apollo Medical Holdings is expected to generate 0.8 times more return on investment than WisdomTree Investments. However, Apollo Medical Holdings is 1.26 times less risky than WisdomTree Investments. It trades about -0.53 of its potential returns per unit of risk. WisdomTree Investments is currently generating about -0.47 per unit of risk. If you would invest 3,980 in Apollo Medical Holdings on September 24, 2024 and sell it today you would lose (680.00) from holding Apollo Medical Holdings or give up 17.09% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Apollo Medical Holdings vs. WisdomTree Investments
Performance |
Timeline |
Apollo Medical Holdings |
WisdomTree Investments |
Apollo Medical and WisdomTree Investments Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apollo Medical and WisdomTree Investments
The main advantage of trading using opposite Apollo Medical and WisdomTree Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Medical position performs unexpectedly, WisdomTree Investments 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 WisdomTree Investments will offset losses from the drop in WisdomTree Investments' long position.Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc |
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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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