Correlation Between GODM Investments and Apollo Power

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

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

Diversification Opportunities for GODM Investments and Apollo Power

-0.54

Correlation Coefficient

GODM Investments  Apollo Power

Excellent diversification

The 3 months correlation between GODM and Apollo is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding GODM Investments and Apollo Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Power and GODM Investments 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 GODM Investments are associated (or correlated) with Apollo Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Power has no effect on the direction of GODM Investments i.e., GODM Investments and Apollo Power go up and down completely randomly.

Pair Corralation between GODM Investments and Apollo Power

Assuming the 90 days trading horizon GODM Investments is expected to under-perform the Apollo Power. But the stock apears to be less risky and, when comparing its historical volatility, GODM Investments is 1.34 times less risky than Apollo Power. The stock trades about -0.27 of its potential returns per unit of risk. The Apollo Power is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  25,320  in Apollo Power on April 24, 2025 and sell it today you would earn a total of  12,480  from holding Apollo Power or generate 49.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.96%
Values	Daily Returns

GODM Investments  vs.  Apollo Power

GODM Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days GODM Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Apollo Power

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Power are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Apollo Power sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GODM Investments and Apollo Power

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

The idea behind GODM Investments and Apollo Power 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.