Correlation Between Apollo Bancorp and Infinity Bank

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

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

Diversification Opportunities for Apollo Bancorp and Infinity Bank

0.21

Correlation Coefficient

Apollo Bancorp  Infinity Bank

Modest diversification

The 3 months correlation between Apollo and Infinity is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Bancorp and Infinity Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinity Bank 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 Infinity Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinity Bank has no effect on the direction of Apollo Bancorp i.e., Apollo Bancorp and Infinity Bank go up and down completely randomly.

Pair Corralation between Apollo Bancorp and Infinity Bank

Given the investment horizon of 90 days Apollo Bancorp is expected to generate 2.65 times less return on investment than Infinity Bank. But when comparing it to its historical volatility, Apollo Bancorp is 1.58 times less risky than Infinity Bank. It trades about 0.13 of its potential returns per unit of risk. Infinity Bank is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,020  in Infinity Bank on May 8, 2025 and sell it today you would earn a total of  430.00  from holding Infinity Bank or generate 42.16% return on investment over 90 days.

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

Apollo Bancorp  vs.  Infinity Bank

Apollo Bancorp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Bancorp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Apollo Bancorp displayed solid returns over the last few months and may actually be approaching a breakup point.

Infinity Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Infinity Bank are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Infinity Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apollo Bancorp and Infinity Bank

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

The idea behind Apollo Bancorp and Infinity Bank 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.