Correlation Between Apollo Power and Accel Solutions

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

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

Diversification Opportunities for Apollo Power and Accel Solutions

-0.84

Correlation Coefficient

Apollo Power  Accel Solutions

Pay attention - limited upside

The 3 months correlation between Apollo and Accel is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Power and Accel Solutions Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accel Solutions Group and Apollo Power 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 Power are associated (or correlated) with Accel Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accel Solutions Group has no effect on the direction of Apollo Power i.e., Apollo Power and Accel Solutions go up and down completely randomly.

Pair Corralation between Apollo Power and Accel Solutions

Assuming the 90 days trading horizon Apollo Power is expected to generate 3.74 times more return on investment than Accel Solutions. However, Apollo Power is 3.74 times more volatile than Accel Solutions Group. It trades about 0.37 of its potential returns per unit of risk. Accel Solutions Group is currently generating about -0.04 per unit of risk. If you would invest  22,350  in Apollo Power on September 25, 2024 and sell it today you would earn a total of  16,990  from holding Apollo Power or generate 76.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	94.44%
Values	Daily Returns

Apollo Power  vs.  Accel Solutions Group

Apollo Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Power has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Accel Solutions Group

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Accel Solutions Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Accel Solutions sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apollo Power and Accel Solutions

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

The idea behind Apollo Power and Accel Solutions Group 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.