Correlation Between Capital Clean and Apollomics

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

By analyzing existing cross correlation between Capital Clean Energy and Apollomics Class A, you can compare the effects of market volatilities on Capital Clean and Apollomics 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 Capital Clean with a short position of Apollomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Clean and Apollomics.

Diversification Opportunities for Capital Clean and Apollomics

0.42

Correlation Coefficient

Capital Clean  Apollomics

Very weak diversification

The 3 months correlation between Capital and Apollomics is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy and Apollomics Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollomics Class A and Capital Clean 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 Capital Clean Energy are associated (or correlated) with Apollomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollomics Class A has no effect on the direction of Capital Clean i.e., Capital Clean and Apollomics go up and down completely randomly.

Pair Corralation between Capital Clean and Apollomics

Given the investment horizon of 90 days Capital Clean is expected to generate 109.23 times less return on investment than Apollomics. But when comparing it to its historical volatility, Capital Clean Energy is 12.67 times less risky than Apollomics. It trades about 0.01 of its potential returns per unit of risk. Apollomics Class A is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,330  in Apollomics Class A on September 27, 2024 and sell it today you would lose (205.10) from holding Apollomics Class A or give up 15.42% of portfolio value over 90 days.

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

Capital Clean Energy  vs.  Apollomics Class A

Capital Clean Energy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Apollomics Class A

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apollomics Class A are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Apollomics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capital Clean and Apollomics

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

The idea behind Capital Clean Energy and Apollomics Class A 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.