Correlation Between Apollo Global and AllianceBernstein

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

Diversification Opportunities for Apollo Global and AllianceBernstein

0.79

Correlation Coefficient

Apollo Global  AllianceBernstein

Poor diversification

The 3 months correlation between Apollo and AllianceBernstein is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and AllianceBernstein Holding LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianceBernstein 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 AllianceBernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AllianceBernstein has no effect on the direction of Apollo Global i.e., Apollo Global and AllianceBernstein go up and down completely randomly.

Pair Corralation between Apollo Global and AllianceBernstein

Considering the 90-day investment horizon Apollo Global Management is expected to generate 1.75 times more return on investment than AllianceBernstein. However, Apollo Global is 1.75 times more volatile than AllianceBernstein Holding LP. It trades about 0.15 of its potential returns per unit of risk. AllianceBernstein Holding LP is currently generating about 0.07 per unit of risk. If you would invest  11,574  in Apollo Global Management on September 1, 2024 and sell it today you would earn a total of  5,929  from holding Apollo Global Management or generate 51.23% return on investment over 90 days.

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

Apollo Global Management  vs.  AllianceBernstein Holding LP

Apollo Global Management

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Management are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Apollo Global displayed solid returns over the last few months and may actually be approaching a breakup point.

AllianceBernstein

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AllianceBernstein Holding LP are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental drivers, AllianceBernstein may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Apollo Global and AllianceBernstein

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

The idea behind Apollo Global Management and AllianceBernstein Holding LP 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 CEOs Directory module to screen CEOs from public companies around the world.