Correlation Between Via Renewables and Apollo Global

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

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

Diversification Opportunities for Via Renewables and Apollo Global

0.82

Correlation Coefficient

Via Renewables  Apollo Global

Very poor diversification

The 3 months correlation between Via and Apollo is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables 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 Via Renewables 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 Via Renewables 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 Via Renewables i.e., Via Renewables and Apollo Global go up and down completely randomly.

Pair Corralation between Via Renewables and Apollo Global

Assuming the 90 days horizon Via Renewables is expected to generate 0.41 times more return on investment than Apollo Global. However, Via Renewables is 2.43 times less risky than Apollo Global. It trades about 0.24 of its potential returns per unit of risk. Apollo Global Management is currently generating about 0.06 per unit of risk. If you would invest  2,246  in Via Renewables on September 23, 2024 and sell it today you would earn a total of  89.00  from holding Via Renewables or generate 3.96% return on investment over 90 days.

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

Via Renewables  vs.  Apollo Global Management

Via Renewables

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Via Renewables may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Apollo Global Management

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Management are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Apollo Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Via Renewables and Apollo Global

The main advantage of trading using opposite Via Renewables and Apollo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Renewables 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 Via Renewables 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.