Correlation Between Volkswagen and Apollo Strategic

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

By analyzing existing cross correlation between Volkswagen AG Pref and Apollo Strategic Growth, you can compare the effects of market volatilities on Volkswagen and Apollo Strategic 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 Volkswagen with a short position of Apollo Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Apollo Strategic.

Diversification Opportunities for Volkswagen and Apollo Strategic

-0.5

Correlation Coefficient

Volkswagen  Apollo Strategic

Very good diversification

The 3 months correlation between Volkswagen and Apollo is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG Pref and Apollo Strategic Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Strategic Growth and Volkswagen 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 Volkswagen AG Pref are associated (or correlated) with Apollo Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Strategic Growth has no effect on the direction of Volkswagen i.e., Volkswagen and Apollo Strategic go up and down completely randomly.

Pair Corralation between Volkswagen and Apollo Strategic

Assuming the 90 days horizon Volkswagen AG Pref is expected to under-perform the Apollo Strategic. In addition to that, Volkswagen is 6.98 times more volatile than Apollo Strategic Growth. It trades about -0.03 of its total potential returns per unit of risk. Apollo Strategic Growth is currently generating about 0.11 per unit of volatility. If you would invest  1,007  in Apollo Strategic Growth on September 28, 2024 and sell it today you would earn a total of  33.00  from holding Apollo Strategic Growth or generate 3.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	27.47%
Values	Daily Returns

Volkswagen AG Pref  vs.  Apollo Strategic Growth

Volkswagen AG Pref

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Volkswagen AG Pref has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Apollo Strategic Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Strategic Growth has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Apollo Strategic is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Volkswagen and Apollo Strategic

The main advantage of trading using opposite Volkswagen and Apollo Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Apollo Strategic 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 Strategic will offset losses from the drop in Apollo Strategic's long position.

The idea behind Volkswagen AG Pref and Apollo Strategic Growth 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.