Correlation Between Chimera Investment and Apollo Commercial

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

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

Diversification Opportunities for Chimera Investment and Apollo Commercial

0.61

Correlation Coefficient

Chimera Investment  Apollo Commercial

Poor diversification

The 3 months correlation between Chimera and Apollo is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chimera Investment and Apollo Commercial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Commercial Real and Chimera Investment 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 Chimera Investment are associated (or correlated) with Apollo Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Commercial Real has no effect on the direction of Chimera Investment i.e., Chimera Investment and Apollo Commercial go up and down completely randomly.

Pair Corralation between Chimera Investment and Apollo Commercial

Considering the 90-day investment horizon Chimera Investment is expected to under-perform the Apollo Commercial. In addition to that, Chimera Investment is 1.04 times more volatile than Apollo Commercial Real. It trades about -0.08 of its total potential returns per unit of risk. Apollo Commercial Real is currently generating about 0.07 per unit of volatility. If you would invest  860.00  in Apollo Commercial Real on February 3, 2025 and sell it today you would earn a total of  89.00  from holding Apollo Commercial Real or generate 10.35% return on investment over 90 days.

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

Chimera Investment  vs.  Apollo Commercial Real

Chimera Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chimera Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in June 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Apollo Commercial Real

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Commercial Real are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Apollo Commercial may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Pair Trading with Chimera Investment and Apollo Commercial

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

The idea behind Chimera Investment and Apollo Commercial Real 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.