Correlation Between Apollo Global and Aegon Funding
Can any of the company-specific risk be diversified away by investing in both Apollo Global and Aegon Funding 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 Aegon Funding 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 Aegon Funding, you can compare the effects of market volatilities on Apollo Global and Aegon Funding 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 Aegon Funding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Global and Aegon Funding.
Diversification Opportunities for Apollo Global and Aegon Funding
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Apollo and Aegon is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Aegon Funding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon Funding 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 Aegon Funding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon Funding has no effect on the direction of Apollo Global i.e., Apollo Global and Aegon Funding go up and down completely randomly.
Pair Corralation between Apollo Global and Aegon Funding
Given the investment horizon of 90 days Apollo Global is expected to generate 1.18 times less return on investment than Aegon Funding. But when comparing it to its historical volatility, Apollo Global Management is 1.23 times less risky than Aegon Funding. It trades about 0.14 of its potential returns per unit of risk. Aegon Funding is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,081 in Aegon Funding on March 28, 2024 and sell it today you would earn a total of 35.50 from holding Aegon Funding or generate 1.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Apollo Global Management vs. Aegon Funding
Performance |
Timeline |
Apollo Global Management |
Aegon Funding |
Apollo Global and Aegon Funding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apollo Global and Aegon Funding
The main advantage of trading using opposite Apollo Global and Aegon Funding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Global position performs unexpectedly, Aegon Funding 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 Aegon Funding will offset losses from the drop in Aegon Funding's long position.Apollo Global vs. Atlanticus Holdings | Apollo Global vs. HUMANA INC | Apollo Global vs. Aquagold International | Apollo Global vs. Barloworld Ltd ADR |
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Check out your portfolio center.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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