Correlation Between ABERFORTH SMCOS and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both ABERFORTH SMCOS and Apollo Investment 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 ABERFORTH SMCOS and Apollo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABERFORTH SMCOS TRLS 01 and Apollo Investment Corp, you can compare the effects of market volatilities on ABERFORTH SMCOS and Apollo Investment 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 ABERFORTH SMCOS with a short position of Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABERFORTH SMCOS and Apollo Investment.
Diversification Opportunities for ABERFORTH SMCOS and Apollo Investment
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ABERFORTH and Apollo is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ABERFORTH SMCOS TRLS 01 and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment Corp and ABERFORTH SMCOS 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 ABERFORTH SMCOS TRLS 01 are associated (or correlated) with Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of ABERFORTH SMCOS i.e., ABERFORTH SMCOS and Apollo Investment go up and down completely randomly.
Pair Corralation between ABERFORTH SMCOS and Apollo Investment
Assuming the 90 days horizon ABERFORTH SMCOS is expected to generate 1.73 times less return on investment than Apollo Investment. But when comparing it to its historical volatility, ABERFORTH SMCOS TRLS 01 is 1.2 times less risky than Apollo Investment. It trades about 0.05 of its potential returns per unit of risk. Apollo Investment Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 820.00 in Apollo Investment Corp on September 20, 2024 and sell it today you would earn a total of 463.00 from holding Apollo Investment Corp or generate 56.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.8% |
Values | Daily Returns |
ABERFORTH SMCOS TRLS 01 vs. Apollo Investment Corp
Performance |
Timeline |
ABERFORTH SMCOS TRLS |
Apollo Investment Corp |
ABERFORTH SMCOS and Apollo Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ABERFORTH SMCOS and Apollo Investment
The main advantage of trading using opposite ABERFORTH SMCOS and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABERFORTH SMCOS position performs unexpectedly, Apollo Investment 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 Investment will offset losses from the drop in Apollo Investment's long position.ABERFORTH SMCOS vs. Apple Inc | ABERFORTH SMCOS vs. Apple Inc | ABERFORTH SMCOS vs. Apple Inc | ABERFORTH SMCOS vs. Apple Inc |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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