Correlation Between Apollo Investment and Accenture Plc

Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Accenture Plc 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 Accenture Plc 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 Accenture plc, you can compare the effects of market volatilities on Apollo Investment and Accenture Plc 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 Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Accenture Plc.

Diversification Opportunities for Apollo Investment and Accenture Plc

0.65

Correlation Coefficient

Apollo Investment  Accenture Plc

Poor diversification

The 3 months correlation between Apollo and Accenture is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc 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 Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of Apollo Investment i.e., Apollo Investment and Accenture Plc go up and down completely randomly.

Pair Corralation between Apollo Investment and Accenture Plc

Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.52 times more return on investment than Accenture Plc. However, Apollo Investment Corp is 1.92 times less risky than Accenture Plc. It trades about 0.08 of its potential returns per unit of risk. Accenture plc is currently generating about 0.02 per unit of risk. If you would invest  1,303  in Apollo Investment Corp on October 8, 2024 and sell it today you would earn a total of  18.00  from holding Apollo Investment Corp or generate 1.38% 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.  Accenture plc

Apollo Investment Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Investment Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Apollo Investment reported solid returns over the last few months and may actually be approaching a breakup point.

Accenture plc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Accenture plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Accenture Plc may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Apollo Investment and Accenture Plc

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

The idea behind Apollo Investment Corp and Accenture plc 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.