Correlation Between Apollo Global and Metal Sky

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

Diversification Opportunities for Apollo Global and Metal Sky

0.54

Correlation Coefficient

Apollo Global  Metal Sky

Very weak diversification

The 3 months correlation between Apollo and Metal is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Metal Sky Star in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metal Sky Star 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 Metal Sky. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metal Sky Star has no effect on the direction of Apollo Global i.e., Apollo Global and Metal Sky go up and down completely randomly.

Pair Corralation between Apollo Global and Metal Sky

Considering the 90-day investment horizon Apollo Global Management is expected to under-perform the Metal Sky. In addition to that, Apollo Global is 1.17 times more volatile than Metal Sky Star. It trades about -0.15 of its total potential returns per unit of risk. Metal Sky Star is currently generating about 0.06 per unit of volatility. If you would invest  1,160  in Metal Sky Star on October 10, 2024 and sell it today you would earn a total of  21.00  from holding Metal Sky Star or generate 1.81% return on investment over 90 days.

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

Apollo Global Management  vs.  Metal Sky Star

Apollo Global Management

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Management are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Apollo Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Metal Sky Star

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Metal Sky Star are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Metal Sky is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Apollo Global and Metal Sky

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

The idea behind Apollo Global Management and Metal Sky Star 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.