Correlation Between ARYA Sciences and Apollo Strategic

Can any of the company-specific risk be diversified away by investing in both ARYA Sciences and Apollo Strategic 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 ARYA Sciences and Apollo Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ARYA Sciences Acquisition and Apollo Strategic Growth, you can compare the effects of market volatilities on ARYA Sciences and Apollo Strategic 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 ARYA Sciences with a short position of Apollo Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARYA Sciences and Apollo Strategic.

Diversification Opportunities for ARYA Sciences and Apollo Strategic

-0.84

Correlation Coefficient

ARYA Sciences  Apollo Strategic

Pay attention - limited upside

The 3 months correlation between ARYA and Apollo is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ARYA Sciences Acquisition and Apollo Strategic Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Strategic Growth and ARYA Sciences 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 ARYA Sciences Acquisition are associated (or correlated) with Apollo Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Strategic Growth has no effect on the direction of ARYA Sciences i.e., ARYA Sciences and Apollo Strategic go up and down completely randomly.

Pair Corralation between ARYA Sciences and Apollo Strategic

Given the investment horizon of 90 days ARYA Sciences Acquisition is expected to under-perform the Apollo Strategic. In addition to that, ARYA Sciences is 13.4 times more volatile than Apollo Strategic Growth. It trades about -0.04 of its total potential returns per unit of risk. Apollo Strategic Growth is currently generating about 0.1 per unit of volatility. If you would invest  1,009  in Apollo Strategic Growth on October 11, 2024 and sell it today you would earn a total of  31.00  from holding Apollo Strategic Growth or generate 3.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	31.92%
Values	Daily Returns

ARYA Sciences Acquisition  vs.  Apollo Strategic Growth

ARYA Sciences Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ARYA Sciences Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ARYA Sciences is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Apollo Strategic Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Strategic Growth has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Apollo Strategic is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ARYA Sciences and Apollo Strategic

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

The idea behind ARYA Sciences Acquisition and Apollo Strategic Growth 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.