Correlation Between Apollo Bancorp and FNB

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

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

Diversification Opportunities for Apollo Bancorp and FNB

-0.24

Correlation Coefficient

Apollo Bancorp  FNB

Very good diversification

The 3 months correlation between Apollo and FNB is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Bancorp and FNB Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB Inc and Apollo Bancorp 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 Bancorp are associated (or correlated) with FNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB Inc has no effect on the direction of Apollo Bancorp i.e., Apollo Bancorp and FNB go up and down completely randomly.

Pair Corralation between Apollo Bancorp and FNB

Given the investment horizon of 90 days Apollo Bancorp is expected to under-perform the FNB. In addition to that, Apollo Bancorp is 1.7 times more volatile than FNB Inc. It trades about -0.03 of its total potential returns per unit of risk. FNB Inc is currently generating about 0.02 per unit of volatility. If you would invest  2,109  in FNB Inc on May 2, 2025 and sell it today you would earn a total of  11.00  from holding FNB Inc or generate 0.52% return on investment over 90 days.

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

Apollo Bancorp  vs.  FNB Inc

Apollo Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apollo Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Apollo Bancorp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

FNB Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FNB Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, FNB is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Apollo Bancorp and FNB

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

The idea behind Apollo Bancorp and FNB Inc 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.