Correlation Between Apollo Investment and PREMIER FOODS

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Can any of the company-specific risk be diversified away by investing in both Apollo Investment and PREMIER FOODS 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 Investment and PREMIER FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Investment Corp and PREMIER FOODS, you can compare the effects of market volatilities on Apollo Investment and PREMIER FOODS 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 Investment with a short position of PREMIER FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and PREMIER FOODS.

Diversification Opportunities for Apollo Investment and PREMIER FOODS

ApolloPREMIERDiversified AwayApolloPREMIERDiversified Away100%
0.47
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Apollo and PREMIER is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and PREMIER FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PREMIER FOODS and Apollo 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 Apollo Investment Corp are associated (or correlated) with PREMIER FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PREMIER FOODS has no effect on the direction of Apollo Investment i.e., Apollo Investment and PREMIER FOODS go up and down completely randomly.

Pair Corralation between Apollo Investment and PREMIER FOODS

Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.72 times more return on investment than PREMIER FOODS. However, Apollo Investment Corp is 1.4 times less risky than PREMIER FOODS. It trades about 0.12 of its potential returns per unit of risk. PREMIER FOODS is currently generating about 0.06 per unit of risk. If you would invest  1,202  in Apollo Investment Corp on September 15, 2024 and sell it today you would earn a total of  95.00  from holding Apollo Investment Corp or generate 7.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Apollo Investment Corp  vs.  PREMIER FOODS

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 0510
JavaScript chart by amCharts 3.21.1555O1 FOJ1
       Timeline  
Apollo Investment Corp 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Investment Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Apollo Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec11.611.81212.212.412.612.81313.2
PREMIER FOODS 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in PREMIER FOODS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, PREMIER FOODS is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2.152.22.252.32.35

Apollo Investment and PREMIER FOODS Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.0-2.25-1.49-0.740.00.811.632.443.25 0.10.20.30.4
JavaScript chart by amCharts 3.21.1555O1 FOJ1
       Returns  

Pair Trading with Apollo Investment and PREMIER FOODS

The main advantage of trading using opposite Apollo Investment and PREMIER FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, PREMIER FOODS 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 PREMIER FOODS will offset losses from the drop in PREMIER FOODS's long position.
The idea behind Apollo Investment Corp and PREMIER FOODS 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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