Correlation Between Apollo Global and Lepanto Consolidated

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

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

Diversification Opportunities for Apollo Global and Lepanto Consolidated

-0.49

Correlation Coefficient

Apollo Global  Lepanto Consolidated

Very good diversification

The 3 months correlation between Apollo and Lepanto is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Capital and Lepanto Consolidated Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lepanto Consolidated and Apollo Global 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 Global Capital are associated (or correlated) with Lepanto Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lepanto Consolidated has no effect on the direction of Apollo Global i.e., Apollo Global and Lepanto Consolidated go up and down completely randomly.

Pair Corralation between Apollo Global and Lepanto Consolidated

Assuming the 90 days trading horizon Apollo Global Capital is expected to under-perform the Lepanto Consolidated. But the stock apears to be less risky and, when comparing its historical volatility, Apollo Global Capital is 1.34 times less risky than Lepanto Consolidated. The stock trades about -0.25 of its potential returns per unit of risk. The Lepanto Consolidated Mining is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  6.60  in Lepanto Consolidated Mining on September 4, 2024 and sell it today you would lose (0.20) from holding Lepanto Consolidated Mining or give up 3.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Apollo Global Capital  vs.  Lepanto Consolidated Mining

Apollo Global Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Global Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Lepanto Consolidated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lepanto Consolidated Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Lepanto Consolidated is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Apollo Global and Lepanto Consolidated

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

The idea behind Apollo Global Capital and Lepanto Consolidated Mining 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.