Correlation Between Apollo Strategic and ARYA Sciences

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

By analyzing existing cross correlation between Apollo Strategic Growth and ARYA Sciences Acquisition, you can compare the effects of market volatilities on Apollo Strategic and ARYA Sciences 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 Strategic with a short position of ARYA Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Strategic and ARYA Sciences.

Diversification Opportunities for Apollo Strategic and ARYA Sciences

0.0

Correlation Coefficient

Apollo Strategic  ARYA Sciences

Pay attention - limited upside

The 3 months correlation between Apollo and ARYA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Strategic Growth and ARYA Sciences Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARYA Sciences Acquisition and Apollo Strategic 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 Strategic Growth are associated (or correlated) with ARYA Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARYA Sciences Acquisition has no effect on the direction of Apollo Strategic i.e., Apollo Strategic and ARYA Sciences go up and down completely randomly.

Pair Corralation between Apollo Strategic and ARYA Sciences

Given the investment horizon of 90 days Apollo Strategic Growth is expected to generate 0.08 times more return on investment than ARYA Sciences. However, Apollo Strategic Growth is 13.08 times less risky than ARYA Sciences. It trades about 0.1 of its potential returns per unit of risk. ARYA Sciences Acquisition is currently generating about -0.04 per unit of risk. If you would invest  1,011  in Apollo Strategic Growth on October 25, 2024 and sell it today you would earn a total of  29.00  from holding Apollo Strategic Growth or generate 2.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	30.18%
Values	Daily Returns

Apollo Strategic Growth  vs.  ARYA Sciences Acquisition

Apollo Strategic Growth

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Apollo Strategic Growth has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Apollo Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ARYA Sciences Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ARYA Sciences Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ARYA Sciences is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Apollo Strategic and ARYA Sciences

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

The idea behind Apollo Strategic Growth and ARYA Sciences Acquisition 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .