Correlation Between Apollo Global and Aquagold International

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

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

Diversification Opportunities for Apollo Global and Aquagold International

-0.23

Correlation Coefficient

Apollo Global  Aquagold International

Very good diversification

The 3 months correlation between Apollo and Aquagold is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International 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 Management are associated (or correlated) with Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of Apollo Global i.e., Apollo Global and Aquagold International go up and down completely randomly.

Pair Corralation between Apollo Global and Aquagold International

Considering the 90-day investment horizon Apollo Global Management is expected to generate 0.18 times more return on investment than Aquagold International. However, Apollo Global Management is 5.41 times less risky than Aquagold International. It trades about 0.2 of its potential returns per unit of risk. Aquagold International is currently generating about -0.13 per unit of risk. If you would invest  13,164  in Apollo Global Management on October 1, 2024 and sell it today you would earn a total of  3,864  from holding Apollo Global Management or generate 29.35% return on investment over 90 days.

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

Apollo Global Management  vs.  Aquagold International

Apollo Global Management

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Management are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Apollo Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Aquagold International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aquagold International 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 fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Apollo Global and Aquagold International

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

The idea behind Apollo Global Management and Aquagold International 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.