Correlation Between AIR LIQUIDE and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both AIR LIQUIDE and Apollo Investment 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 AIR LIQUIDE and Apollo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR LIQUIDE ADR and Apollo Investment Corp, you can compare the effects of market volatilities on AIR LIQUIDE and Apollo Investment 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 AIR LIQUIDE with a short position of Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR LIQUIDE and Apollo Investment.
Diversification Opportunities for AIR LIQUIDE and Apollo Investment
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AIR and Apollo is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding AIR LIQUIDE ADR and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment Corp and AIR LIQUIDE 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 AIR LIQUIDE ADR are associated (or correlated) with Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of AIR LIQUIDE i.e., AIR LIQUIDE and Apollo Investment go up and down completely randomly.
Pair Corralation between AIR LIQUIDE and Apollo Investment
Assuming the 90 days trading horizon AIR LIQUIDE is expected to generate 5.79 times less return on investment than Apollo Investment. But when comparing it to its historical volatility, AIR LIQUIDE ADR is 1.01 times less risky than Apollo Investment. It trades about 0.04 of its potential returns per unit of risk. Apollo Investment Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 984.00 in Apollo Investment Corp on April 21, 2025 and sell it today you would earn a total of 172.00 from holding Apollo Investment Corp or generate 17.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AIR LIQUIDE ADR vs. Apollo Investment Corp
Performance |
Timeline |
AIR LIQUIDE ADR |
Apollo Investment Corp |
AIR LIQUIDE and Apollo Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AIR LIQUIDE and Apollo Investment
The main advantage of trading using opposite AIR LIQUIDE and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR LIQUIDE position performs unexpectedly, Apollo Investment 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 Apollo Investment will offset losses from the drop in Apollo Investment's long position.AIR LIQUIDE vs. Computer And Technologies | AIR LIQUIDE vs. ASM Pacific Technology | AIR LIQUIDE vs. AGF Management Limited | AIR LIQUIDE vs. Ares Management Corp |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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