Correlation Between Apollo Investment and ADHI KARYA

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

Diversification Opportunities for Apollo Investment and ADHI KARYA

0.78

Correlation Coefficient

Apollo Investment  ADHI KARYA

Poor diversification

The 3 months correlation between Apollo and ADHI is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and ADHI KARYA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADHI KARYA 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 ADHI KARYA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADHI KARYA has no effect on the direction of Apollo Investment i.e., Apollo Investment and ADHI KARYA go up and down completely randomly.

Pair Corralation between Apollo Investment and ADHI KARYA

Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.06 times more return on investment than ADHI KARYA. However, Apollo Investment Corp is 15.69 times less risky than ADHI KARYA. It trades about 0.0 of its potential returns per unit of risk. ADHI KARYA is currently generating about -0.04 per unit of risk. If you would invest  1,268  in Apollo Investment Corp on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Apollo Investment Corp or generate 0.0% 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.  ADHI KARYA

Apollo Investment Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Investment Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Apollo Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ADHI KARYA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ADHI KARYA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, ADHI KARYA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apollo Investment and ADHI KARYA

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

The idea behind Apollo Investment Corp and ADHI KARYA 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.