Correlation Between Apollo Global and KeyCorp

Can any of the company-specific risk be diversified away by investing in both Apollo Global and KeyCorp 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 KeyCorp 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 KeyCorp, you can compare the effects of market volatilities on Apollo Global and KeyCorp 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 KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Global and KeyCorp.

Diversification Opportunities for Apollo Global and KeyCorp

-0.3

Correlation Coefficient

Apollo Global  KeyCorp

Very good diversification

The 3 months correlation between Apollo and KeyCorp is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp 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 KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of Apollo Global i.e., Apollo Global and KeyCorp go up and down completely randomly.

Pair Corralation between Apollo Global and KeyCorp

Assuming the 90 days trading horizon Apollo Global Management is expected to under-perform the KeyCorp. In addition to that, Apollo Global is 2.81 times more volatile than KeyCorp. It trades about -0.11 of its total potential returns per unit of risk. KeyCorp is currently generating about 0.17 per unit of volatility. If you would invest  2,339  in KeyCorp on December 23, 2024 and sell it today you would earn a total of  180.00  from holding KeyCorp or generate 7.7% return on investment over 90 days.

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

Apollo Global Management  vs.  KeyCorp

Apollo Global Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apollo Global Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Preferred Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

KeyCorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly sluggish basic indicators, KeyCorp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Apollo Global and KeyCorp

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

The idea behind Apollo Global Management and KeyCorp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.