Correlation Between LFM Properties and Apollo Global

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

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

Diversification Opportunities for LFM Properties and Apollo Global

0.47

Correlation Coefficient

LFM Properties  Apollo Global

Very weak diversification

The 3 months correlation between LFM and Apollo is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding LFM Properties Corp 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 LFM Properties 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 LFM Properties Corp 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 LFM Properties i.e., LFM Properties and Apollo Global go up and down completely randomly.

Pair Corralation between LFM Properties and Apollo Global

Assuming the 90 days trading horizon LFM Properties Corp is expected to generate 2.27 times more return on investment than Apollo Global. However, LFM Properties is 2.27 times more volatile than Apollo Global Capital. It trades about 0.05 of its potential returns per unit of risk. Apollo Global Capital is currently generating about -0.08 per unit of risk. If you would invest  5.10  in LFM Properties Corp on September 2, 2024 and sell it today you would earn a total of  0.00  from holding LFM Properties Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	55.79%
Values	Daily Returns

LFM Properties Corp  vs.  Apollo Global Capital

LFM Properties Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LFM Properties Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Apollo Global Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Global Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with LFM Properties and Apollo Global

The main advantage of trading using opposite LFM Properties and Apollo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LFM Properties 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 LFM Properties Corp 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.