Correlation Between Apollo Investment and United Natural
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and United Natural 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 United Natural 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 United Natural Foods, you can compare the effects of market volatilities on Apollo Investment and United Natural 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 United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and United Natural.
Diversification Opportunities for Apollo Investment and United Natural
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apollo and United is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and United Natural Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Natural Foods 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 United Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Natural Foods has no effect on the direction of Apollo Investment i.e., Apollo Investment and United Natural go up and down completely randomly.
Pair Corralation between Apollo Investment and United Natural
Assuming the 90 days trading horizon Apollo Investment Corp is expected to under-perform the United Natural. But the stock apears to be less risky and, when comparing its historical volatility, Apollo Investment Corp is 2.61 times less risky than United Natural. The stock trades about -0.06 of its potential returns per unit of risk. The United Natural Foods is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,429 in United Natural Foods on December 22, 2024 and sell it today you would lose (83.00) from holding United Natural Foods or give up 3.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Apollo Investment Corp vs. United Natural Foods
Performance |
Timeline |
Apollo Investment Corp |
United Natural Foods |
Apollo Investment and United Natural Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apollo Investment and United Natural
The main advantage of trading using opposite Apollo Investment and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, United Natural 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 United Natural will offset losses from the drop in United Natural's long position.Apollo Investment vs. MICRONIC MYDATA | Apollo Investment vs. Nucletron Electronic Aktiengesellschaft | Apollo Investment vs. LG Electronics | Apollo Investment vs. UET United Electronic |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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