Correlation Between Apollo Investment and ROHM

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

Diversification Opportunities for Apollo Investment and ROHM

-0.88

Correlation Coefficient

Apollo Investment  ROHM

Pay attention - limited upside

The 3 months correlation between Apollo and ROHM is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and ROHM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROHM 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 ROHM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROHM has no effect on the direction of Apollo Investment i.e., Apollo Investment and ROHM go up and down completely randomly.

Pair Corralation between Apollo Investment and ROHM

Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.57 times more return on investment than ROHM. However, Apollo Investment Corp is 1.74 times less risky than ROHM. It trades about 0.07 of its potential returns per unit of risk. ROHM Co is currently generating about -0.05 per unit of risk. If you would invest  820.00  in Apollo Investment Corp on September 20, 2024 and sell it today you would earn a total of  457.00  from holding Apollo Investment Corp or generate 55.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Apollo Investment Corp  vs.  ROHM Co

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.

ROHM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ROHM Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Apollo Investment and ROHM

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

The idea behind Apollo Investment Corp and ROHM Co 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 Stocks Directory module to find actively traded stocks across global markets.