Correlation Between Apollo Investment and Corporate Travel

Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Corporate Travel 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 Investment and Corporate Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apollo Investment Corp and Corporate Travel Management, you can compare the effects of market volatilities on Apollo Investment and Corporate Travel 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 Investment with a short position of Corporate Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Corporate Travel.

Diversification Opportunities for Apollo Investment and Corporate Travel

0.75

Correlation Coefficient

Apollo Investment  Corporate Travel

Poor diversification

The 3 months correlation between Apollo and Corporate is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Corporate Travel Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Travel Man and Apollo Investment 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 Investment Corp are associated (or correlated) with Corporate Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Travel Man has no effect on the direction of Apollo Investment i.e., Apollo Investment and Corporate Travel go up and down completely randomly.

Pair Corralation between Apollo Investment and Corporate Travel

Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.39 times more return on investment than Corporate Travel. However, Apollo Investment Corp is 2.55 times less risky than Corporate Travel. It trades about 0.09 of its potential returns per unit of risk. Corporate Travel Management is currently generating about -0.21 per unit of risk. If you would invest  1,265  in Apollo Investment Corp on September 20, 2024 and sell it today you would earn a total of  18.00  from holding Apollo Investment Corp or generate 1.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Apollo Investment Corp  vs.  Corporate Travel Management

Apollo Investment Corp

Risk-Adjusted Performance

9 of 100

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 fragile basic indicators, Apollo Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Corporate Travel Man

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Corporate Travel Management are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Corporate Travel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Apollo Investment and Corporate Travel

The main advantage of trading using opposite Apollo Investment and Corporate Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Corporate Travel 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 Corporate Travel will offset losses from the drop in Corporate Travel's long position.

The idea behind Apollo Investment Corp and Corporate Travel Management 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.