Correlation Between Investor and Apollo Global

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

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

Diversification Opportunities for Investor and Apollo Global

-0.77

Correlation Coefficient

Investor  Apollo Global

Pay attention - limited upside

The 3 months correlation between Investor and Apollo is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Investor AB and Apollo Global Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Global Management and Investor 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 Investor AB 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 Management has no effect on the direction of Investor i.e., Investor and Apollo Global go up and down completely randomly.

Pair Corralation between Investor and Apollo Global

Assuming the 90 days horizon Investor AB is expected to generate 0.6 times more return on investment than Apollo Global. However, Investor AB is 1.67 times less risky than Apollo Global. It trades about 0.12 of its potential returns per unit of risk. Apollo Global Management is currently generating about -0.12 per unit of risk. If you would invest  2,699  in Investor AB on December 22, 2024 and sell it today you would earn a total of  262.00  from holding Investor AB or generate 9.71% return on investment over 90 days.

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

Investor AB  vs.  Apollo Global Management

Investor AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Investor AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Investor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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.

Pair Trading with Investor and Apollo Global

The main advantage of trading using opposite Investor and Apollo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investor 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 Investor AB and Apollo Global Management 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.