Correlation Between Apollo Bancorp and Ledyard Financial

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

By analyzing existing cross correlation between Apollo Bancorp and Ledyard Financial Group, you can compare the effects of market volatilities on Apollo Bancorp and Ledyard Financial 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 Bancorp with a short position of Ledyard Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Bancorp and Ledyard Financial.

Diversification Opportunities for Apollo Bancorp and Ledyard Financial

-0.46

Correlation Coefficient

Apollo Bancorp  Ledyard Financial

Very good diversification

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

Pair Corralation between Apollo Bancorp and Ledyard Financial

Given the investment horizon of 90 days Apollo Bancorp is expected to generate 1.27 times less return on investment than Ledyard Financial. But when comparing it to its historical volatility, Apollo Bancorp is 1.02 times less risky than Ledyard Financial. It trades about 0.01 of its potential returns per unit of risk. Ledyard Financial Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,686  in Ledyard Financial Group on October 26, 2024 and sell it today you would lose (271.00) from holding Ledyard Financial Group or give up 16.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	74.53%
Values	Daily Returns

Apollo Bancorp  vs.  Ledyard Financial Group

Apollo Bancorp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, Apollo Bancorp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Ledyard Financial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ledyard Financial Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Ledyard Financial is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Apollo Bancorp and Ledyard Financial

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

The idea behind Apollo Bancorp and Ledyard Financial Group 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.