Correlation Between Apollo Global and Victory Capital

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

Diversification Opportunities for Apollo Global and Victory Capital

0.8

Correlation Coefficient

Apollo Global  Victory Capital

Very poor diversification

The 3 months correlation between Apollo and Victory is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Victory Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Capital Holdings 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 Victory Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Capital Holdings has no effect on the direction of Apollo Global i.e., Apollo Global and Victory Capital go up and down completely randomly.

Pair Corralation between Apollo Global and Victory Capital

Considering the 90-day investment horizon Apollo Global Management is expected to under-perform the Victory Capital. But the stock apears to be less risky and, when comparing its historical volatility, Apollo Global Management is 1.02 times less risky than Victory Capital. The stock trades about -0.1 of its potential returns per unit of risk. The Victory Capital Holdings is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  6,522  in Victory Capital Holdings on December 29, 2024 and sell it today you would lose (541.00) from holding Victory Capital Holdings or give up 8.3% of portfolio value over 90 days.

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

Apollo Global Management  vs.  Victory Capital Holdings

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. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Victory Capital Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Capital Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Apollo Global and Victory Capital

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

The idea behind Apollo Global Management and Victory Capital Holdings 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.