Correlation Between Apollo Global and Benguet Corp

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

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

Diversification Opportunities for Apollo Global and Benguet Corp

0.24

Correlation Coefficient

Apollo Global  Benguet Corp

Modest diversification

The 3 months correlation between Apollo and Benguet is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Capital and Benguet Corp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benguet Corp A and Apollo Global 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 Global Capital are associated (or correlated) with Benguet Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benguet Corp A has no effect on the direction of Apollo Global i.e., Apollo Global and Benguet Corp go up and down completely randomly.

Pair Corralation between Apollo Global and Benguet Corp

Assuming the 90 days trading horizon Apollo Global Capital is expected to generate 2.0 times more return on investment than Benguet Corp. However, Apollo Global is 2.0 times more volatile than Benguet Corp A. It trades about 0.03 of its potential returns per unit of risk. Benguet Corp A is currently generating about 0.01 per unit of risk. If you would invest  0.43  in Apollo Global Capital on December 30, 2024 and sell it today you would lose (0.01) from holding Apollo Global Capital or give up 2.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	85.48%
Values	Daily Returns

Apollo Global Capital  vs.  Benguet Corp A

Apollo Global Capital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Capital are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Apollo Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

Benguet Corp A

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Apollo Global and Benguet Corp

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

The idea behind Apollo Global Capital and Benguet Corp A 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.