Correlation Between Apollo Power and Infimer

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

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

Diversification Opportunities for Apollo Power and Infimer

-0.15

Correlation Coefficient

Apollo Power  Infimer

Good diversification

The 3 months correlation between Apollo and Infimer is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Power and Infimer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infimer 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 Infimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infimer has no effect on the direction of Apollo Power i.e., Apollo Power and Infimer go up and down completely randomly.

Pair Corralation between Apollo Power and Infimer

Assuming the 90 days trading horizon Apollo Power is expected to under-perform the Infimer. But the stock apears to be less risky and, when comparing its historical volatility, Apollo Power is 25.41 times less risky than Infimer. The stock trades about -0.08 of its potential returns per unit of risk. The Infimer is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  31,150  in Infimer on September 27, 2024 and sell it today you would earn a total of  948,850  from holding Infimer or generate 3046.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.73%
Values	Daily Returns

Apollo Power  vs.  Infimer

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Infimer

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Infimer are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Infimer sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apollo Power and Infimer

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

The idea behind Apollo Power and Infimer 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.