Correlation Between Apollo Global and Cipher Mining

Can any of the company-specific risk be diversified away by investing in both Apollo Global and Cipher Mining 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 Cipher Mining 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 Cipher Mining, you can compare the effects of market volatilities on Apollo Global and Cipher Mining 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 Cipher Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Global and Cipher Mining.

Diversification Opportunities for Apollo Global and Cipher Mining

0.94

Correlation Coefficient

Apollo Global  Cipher Mining

Almost no diversification

The 3 months correlation between Apollo and Cipher is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Cipher Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipher Mining 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 Cipher Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipher Mining has no effect on the direction of Apollo Global i.e., Apollo Global and Cipher Mining go up and down completely randomly.

Pair Corralation between Apollo Global and Cipher Mining

Considering the 90-day investment horizon Apollo Global is expected to generate 1.92 times less return on investment than Cipher Mining. But when comparing it to its historical volatility, Apollo Global Management is 3.35 times less risky than Cipher Mining. It trades about 0.34 of its potential returns per unit of risk. Cipher Mining is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  298.00  in Cipher Mining on September 4, 2024 and sell it today you would earn a total of  332.00  from holding Cipher Mining or generate 111.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Apollo Global Management  vs.  Cipher Mining

Apollo Global Management

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Management are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Apollo Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Cipher Mining

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cipher Mining are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Cipher Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apollo Global and Cipher Mining

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

The idea behind Apollo Global Management and Cipher 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.