Correlation Between Apollo Global and AssetMark Financial

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

Diversification Opportunities for Apollo Global and AssetMark Financial

-0.16

Correlation Coefficient

Apollo Global  AssetMark Financial

Good diversification

The 3 months correlation between Apollo and AssetMark is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and AssetMark Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AssetMark Financial 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 AssetMark Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AssetMark Financial has no effect on the direction of Apollo Global i.e., Apollo Global and AssetMark Financial go up and down completely randomly.

Pair Corralation between Apollo Global and AssetMark Financial

Considering the 90-day investment horizon Apollo Global Management is expected to generate 5.94 times more return on investment than AssetMark Financial. However, Apollo Global is 5.94 times more volatile than AssetMark Financial Holdings. It trades about 0.08 of its potential returns per unit of risk. AssetMark Financial Holdings is currently generating about 0.16 per unit of risk. If you would invest  10,934  in Apollo Global Management on March 12, 2024 and sell it today you would earn a total of  302.00  from holding Apollo Global Management or generate 2.76% 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.  AssetMark Financial Holdings

Apollo Global Management

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Management are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Apollo Global is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

AssetMark Financial

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days AssetMark Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, AssetMark Financial is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Apollo Global and AssetMark Financial

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

The idea behind Apollo Global Management and AssetMark Financial Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.