Correlation Between Apollo Global and Associated Capital

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

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

Diversification Opportunities for Apollo Global and Associated Capital

-0.48

Correlation Coefficient

Apollo Global  Associated Capital

Very good diversification

The 3 months correlation between Apollo and Associated is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Associated Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Capital and Apollo Global 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 Apollo Global Management are associated (or correlated) with Associated Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Capital has no effect on the direction of Apollo Global i.e., Apollo Global and Associated Capital go up and down completely randomly.

Pair Corralation between Apollo Global and Associated Capital

Considering the 90-day investment horizon Apollo Global Management is expected to under-perform the Associated Capital. In addition to that, Apollo Global is 2.63 times more volatile than Associated Capital Group. It trades about -0.05 of its total potential returns per unit of risk. Associated Capital Group is currently generating about -0.01 per unit of volatility. If you would invest  3,224  in Associated Capital Group on February 2, 2024 and sell it today you would lose (9.00) from holding Associated Capital Group or give up 0.28% of portfolio value over 90 days.

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

Apollo Global Management  vs.  Associated Capital Group

Apollo Global Management

Risk-Adjusted Performance

4 of 100

OK

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

Associated Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Associated Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Associated Capital is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Apollo Global and Associated Capital

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

The idea behind Apollo Global Management and Associated Capital Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.