Correlation Between Stellus Capital and Apollo Global

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

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

Diversification Opportunities for Stellus Capital and Apollo Global

0.03

Correlation Coefficient

Stellus Capital  Apollo Global

Significant diversification

The 3 months correlation between Stellus and Apollo is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Stellus Capital Investment 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 Stellus Capital 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 Stellus Capital Investment 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 Stellus Capital i.e., Stellus Capital and Apollo Global go up and down completely randomly.

Pair Corralation between Stellus Capital and Apollo Global

Considering the 90-day investment horizon Stellus Capital Investment is expected to generate 0.57 times more return on investment than Apollo Global. However, Stellus Capital Investment is 1.75 times less risky than Apollo Global. It trades about 0.05 of its potential returns per unit of risk. Apollo Global Management is currently generating about -0.13 per unit of risk. If you would invest  1,363  in Stellus Capital Investment on October 5, 2024 and sell it today you would earn a total of  13.00  from holding Stellus Capital Investment or generate 0.95% return on investment over 90 days.

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

Stellus Capital Investment  vs.  Apollo Global Management

Stellus Capital Inve

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stellus Capital Investment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Stellus Capital is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Apollo Global Management

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Management are ranked lower than 13 (%) 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 Stellus Capital and Apollo Global

The main advantage of trading using opposite Stellus Capital and Apollo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellus Capital 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 Stellus Capital Investment 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.

Check out your portfolio center.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.