Correlation Between Apollo Global and Virtus Investment

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

Diversification Opportunities for Apollo Global and Virtus Investment

0.58

Correlation Coefficient

Apollo Global  Virtus Investment

Very weak diversification

The 3 months correlation between Apollo and Virtus is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Virtus Investment Partners, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of Apollo Global i.e., Apollo Global and Virtus Investment go up and down completely randomly.

Pair Corralation between Apollo Global and Virtus Investment

Considering the 90-day investment horizon Apollo Global Management is expected to generate 1.58 times more return on investment than Virtus Investment. However, Apollo Global is 1.58 times more volatile than Virtus Investment Partners,. It trades about -0.02 of its potential returns per unit of risk. Virtus Investment Partners, is currently generating about -0.31 per unit of risk. If you would invest  17,437  in Apollo Global Management on October 26, 2024 and sell it today you would lose (231.00) from holding Apollo Global Management or give up 1.32% of portfolio value over 90 days.

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

Apollo Global Management  vs.  Virtus Investment Partners,

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 weak basic indicators, Apollo Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Virtus Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus Investment Partners, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Virtus Investment is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Apollo Global and Virtus Investment

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

The idea behind Apollo Global Management and Virtus Investment Partners, 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..