Correlation Between Apollo Global and Skillful Craftsman

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

By analyzing existing cross correlation between Apollo Global Management and Skillful Craftsman Education, you can compare the effects of market volatilities on Apollo Global and Skillful Craftsman 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 Skillful Craftsman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Global and Skillful Craftsman.

Diversification Opportunities for Apollo Global and Skillful Craftsman

0.19

Correlation Coefficient

Apollo Global  Skillful Craftsman

Average diversification

The 3 months correlation between Apollo and Skillful is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Skillful Craftsman Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skillful Craftsman 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 Management are associated (or correlated) with Skillful Craftsman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skillful Craftsman has no effect on the direction of Apollo Global i.e., Apollo Global and Skillful Craftsman go up and down completely randomly.

Pair Corralation between Apollo Global and Skillful Craftsman

Assuming the 90 days trading horizon Apollo Global Management is expected to under-perform the Skillful Craftsman. But the preferred stock apears to be less risky and, when comparing its historical volatility, Apollo Global Management is 1.82 times less risky than Skillful Craftsman. The preferred stock trades about -0.13 of its potential returns per unit of risk. The Skillful Craftsman Education is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  106.00  in Skillful Craftsman Education on October 10, 2024 and sell it today you would earn a total of  4.00  from holding Skillful Craftsman Education or generate 3.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Apollo Global Management  vs.  Skillful Craftsman Education

Apollo Global Management

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Management are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Apollo Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Skillful Craftsman

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Skillful Craftsman Education are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Skillful Craftsman disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apollo Global and Skillful Craftsman

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

The idea behind Apollo Global Management and Skillful Craftsman Education 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.