Correlation Between VARIOUS EATERIES and Apollo Investment

Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES and Apollo Investment 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 VARIOUS EATERIES and Apollo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VARIOUS EATERIES LS and Apollo Investment Corp, you can compare the effects of market volatilities on VARIOUS EATERIES and Apollo Investment 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 VARIOUS EATERIES with a short position of Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and Apollo Investment.

Diversification Opportunities for VARIOUS EATERIES and Apollo Investment

-0.46

Correlation Coefficient

VARIOUS EATERIES  Apollo Investment

Very good diversification

The 3 months correlation between VARIOUS and Apollo is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment Corp and VARIOUS EATERIES 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 VARIOUS EATERIES LS are associated (or correlated) with Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of VARIOUS EATERIES i.e., VARIOUS EATERIES and Apollo Investment go up and down completely randomly.

Pair Corralation between VARIOUS EATERIES and Apollo Investment

Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the Apollo Investment. But the stock apears to be less risky and, when comparing its historical volatility, VARIOUS EATERIES LS is 1.11 times less risky than Apollo Investment. The stock trades about -0.03 of its potential returns per unit of risk. The Apollo Investment Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,328  in Apollo Investment Corp on October 10, 2024 and sell it today you would lose (9.00) from holding Apollo Investment Corp or give up 0.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

VARIOUS EATERIES LS  vs.  Apollo Investment Corp

VARIOUS EATERIES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VARIOUS EATERIES LS 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.

Apollo Investment Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Investment Corp are ranked lower than 14 (%) 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 February 2025.

Pair Trading with VARIOUS EATERIES and Apollo Investment

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

The idea behind VARIOUS EATERIES LS and Apollo Investment Corp 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.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.