Correlation Between Cebu Air and Apollo Global

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

By analyzing existing cross correlation between Cebu Air Preferred and Apollo Global Capital, you can compare the effects of market volatilities on Cebu Air and Apollo Global 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 Cebu Air with a short position of Apollo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and Apollo Global.

Diversification Opportunities for Cebu Air and Apollo Global

0.49

Correlation Coefficient

Cebu Air  Apollo Global

Very weak diversification

The 3 months correlation between Cebu and Apollo is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air Preferred and Apollo Global Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Global Capital and Cebu Air 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 Cebu Air Preferred are associated (or correlated) with Apollo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Global Capital has no effect on the direction of Cebu Air i.e., Cebu Air and Apollo Global go up and down completely randomly.

Pair Corralation between Cebu Air and Apollo Global

Assuming the 90 days trading horizon Cebu Air Preferred is expected to generate 0.3 times more return on investment than Apollo Global. However, Cebu Air Preferred is 3.28 times less risky than Apollo Global. It trades about 0.05 of its potential returns per unit of risk. Apollo Global Capital is currently generating about -0.04 per unit of risk. If you would invest  3,310  in Cebu Air Preferred on October 9, 2024 and sell it today you would earn a total of  485.00  from holding Cebu Air Preferred or generate 14.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	89.17%
Values	Daily Returns

Cebu Air Preferred  vs.  Apollo Global Capital

Cebu Air Preferred

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cebu Air Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Cebu Air is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Apollo Global Capital

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Capital are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Apollo Global may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cebu Air and Apollo Global

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

The idea behind Cebu Air Preferred and Apollo Global Capital 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.