Correlation Between Carbon Streaming and Apollo Global

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

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

Diversification Opportunities for Carbon Streaming and Apollo Global

-0.39

Correlation Coefficient

Carbon Streaming  Apollo Global

Very good diversification

The 3 months correlation between Carbon and Apollo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Carbon Streaming Corp 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 Carbon Streaming 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 Carbon Streaming 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 Management has no effect on the direction of Carbon Streaming i.e., Carbon Streaming and Apollo Global go up and down completely randomly.

Pair Corralation between Carbon Streaming and Apollo Global

Assuming the 90 days horizon Carbon Streaming Corp is expected to under-perform the Apollo Global. In addition to that, Carbon Streaming is 2.28 times more volatile than Apollo Global Management. It trades about -0.03 of its total potential returns per unit of risk. Apollo Global Management is currently generating about 0.18 per unit of volatility. If you would invest  13,384  in Apollo Global Management on October 7, 2024 and sell it today you would earn a total of  3,522  from holding Apollo Global Management or generate 26.32% return on investment over 90 days.

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

Carbon Streaming Corp  vs.  Apollo Global Management

Carbon Streaming Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carbon Streaming Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Apollo Global Management

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Management are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Apollo Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carbon Streaming and Apollo Global

The main advantage of trading using opposite Carbon Streaming and Apollo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carbon Streaming 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 Carbon Streaming Corp 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.