Correlation Between Apollo Investment and Zanaga Iron

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Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Zanaga Iron 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 Investment and Zanaga Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Investment Corp and Zanaga Iron Ore, you can compare the effects of market volatilities on Apollo Investment and Zanaga Iron 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 Investment with a short position of Zanaga Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Zanaga Iron.

Diversification Opportunities for Apollo Investment and Zanaga Iron

0.23
  Correlation Coefficient

Modest diversification

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

Pair Corralation between Apollo Investment and Zanaga Iron

Assuming the 90 days trading horizon Apollo Investment Corp is expected to generate 0.28 times more return on investment than Zanaga Iron. However, Apollo Investment Corp is 3.63 times less risky than Zanaga Iron. It trades about 0.19 of its potential returns per unit of risk. Zanaga Iron Ore is currently generating about -0.01 per unit of risk. If you would invest  984.00  in Apollo Investment Corp on April 20, 2025 and sell it today you would earn a total of  147.00  from holding Apollo Investment Corp or generate 14.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Apollo Investment Corp  vs.  Zanaga Iron Ore

 Performance 
       Timeline  
Apollo Investment Corp 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Investment Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Apollo Investment reported solid returns over the last few months and may actually be approaching a breakup point.
Zanaga Iron Ore 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Zanaga Iron Ore has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Zanaga Iron is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Apollo Investment and Zanaga Iron Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apollo Investment and Zanaga Iron

The main advantage of trading using opposite Apollo Investment and Zanaga Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Zanaga Iron 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 Zanaga Iron will offset losses from the drop in Zanaga Iron's long position.
The idea behind Apollo Investment Corp and Zanaga Iron Ore 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.
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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