Correlation Between Apollo Investment and ESSILORLUXOTTICA
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and ESSILORLUXOTTICA 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 ESSILORLUXOTTICA 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 ESSILORLUXOTTICA 12ON, you can compare the effects of market volatilities on Apollo Investment and ESSILORLUXOTTICA 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 ESSILORLUXOTTICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and ESSILORLUXOTTICA.
Diversification Opportunities for Apollo Investment and ESSILORLUXOTTICA
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apollo and ESSILORLUXOTTICA is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and ESSILORLUXOTTICA 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSILORLUXOTTICA 12ON 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 ESSILORLUXOTTICA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESSILORLUXOTTICA 12ON has no effect on the direction of Apollo Investment i.e., Apollo Investment and ESSILORLUXOTTICA go up and down completely randomly.
Pair Corralation between Apollo Investment and ESSILORLUXOTTICA
Assuming the 90 days trading horizon Apollo Investment is expected to generate 9.12 times less return on investment than ESSILORLUXOTTICA. In addition to that, Apollo Investment is 1.29 times more volatile than ESSILORLUXOTTICA 12ON. It trades about 0.01 of its total potential returns per unit of risk. ESSILORLUXOTTICA 12ON is currently generating about 0.15 per unit of volatility. If you would invest 11,300 in ESSILORLUXOTTICA 12ON on October 11, 2024 and sell it today you would earn a total of 300.00 from holding ESSILORLUXOTTICA 12ON or generate 2.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Apollo Investment Corp vs. ESSILORLUXOTTICA 12ON
Performance |
Timeline |
Apollo Investment Corp |
ESSILORLUXOTTICA 12ON |
Apollo Investment and ESSILORLUXOTTICA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apollo Investment and ESSILORLUXOTTICA
The main advantage of trading using opposite Apollo Investment and ESSILORLUXOTTICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, ESSILORLUXOTTICA 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 ESSILORLUXOTTICA will offset losses from the drop in ESSILORLUXOTTICA's long position.Apollo Investment vs. AOI Electronics Co | Apollo Investment vs. Nucletron Electronic Aktiengesellschaft | Apollo Investment vs. Benchmark Electronics | Apollo Investment vs. alstria office REIT AG |
ESSILORLUXOTTICA vs. Apollo Investment Corp | ESSILORLUXOTTICA vs. Alfa Financial Software | ESSILORLUXOTTICA vs. CHRYSALIS INVESTMENTS LTD | ESSILORLUXOTTICA vs. SCOTT TECHNOLOGY |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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