Correlation Between Apollo Commercial and Acres Commercial

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

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

Diversification Opportunities for Apollo Commercial and Acres Commercial

0.03

Correlation Coefficient

Apollo Commercial  Acres Commercial

Significant diversification

The 3 months correlation between Apollo and Acres is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Commercial Real and Acres Commercial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acres Commercial Realty and Apollo Commercial 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 Commercial Real are associated (or correlated) with Acres Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acres Commercial Realty has no effect on the direction of Apollo Commercial i.e., Apollo Commercial and Acres Commercial go up and down completely randomly.

Pair Corralation between Apollo Commercial and Acres Commercial

Considering the 90-day investment horizon Apollo Commercial Real is expected to under-perform the Acres Commercial. In addition to that, Apollo Commercial is 1.01 times more volatile than Acres Commercial Realty. It trades about -0.09 of its total potential returns per unit of risk. Acres Commercial Realty is currently generating about 0.13 per unit of volatility. If you would invest  1,546  in Acres Commercial Realty on September 3, 2024 and sell it today you would earn a total of  181.00  from holding Acres Commercial Realty or generate 11.71% return on investment over 90 days.

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

Apollo Commercial Real  vs.  Acres Commercial Realty

Apollo Commercial Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Commercial Real 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 recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Acres Commercial Realty

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Acres Commercial Realty are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Acres Commercial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Apollo Commercial and Acres Commercial

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

The idea behind Apollo Commercial Real and Acres Commercial Realty 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.