Correlation Between Apollo Senior and MFS Investment

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

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

Diversification Opportunities for Apollo Senior and MFS Investment

0.29

Correlation Coefficient

Apollo Senior  MFS Investment

Modest diversification

The 3 months correlation between Apollo and MFS is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Senior Floating and MFS Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Investment Grade and Apollo Senior 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 Senior Floating are associated (or correlated) with MFS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Investment Grade has no effect on the direction of Apollo Senior i.e., Apollo Senior and MFS Investment go up and down completely randomly.

Pair Corralation between Apollo Senior and MFS Investment

Considering the 90-day investment horizon Apollo Senior Floating is expected to generate 0.95 times more return on investment than MFS Investment. However, Apollo Senior Floating is 1.05 times less risky than MFS Investment. It trades about 0.15 of its potential returns per unit of risk. MFS Investment Grade is currently generating about 0.06 per unit of risk. If you would invest  1,015  in Apollo Senior Floating on September 15, 2024 and sell it today you would earn a total of  471.00  from holding Apollo Senior Floating or generate 46.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	79.39%
Values	Daily Returns

Apollo Senior Floating  vs.  MFS Investment Grade

Apollo Senior Floating

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Senior Floating has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable technical and fundamental indicators, Apollo Senior is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

MFS Investment Grade

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MFS Investment Grade has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, MFS Investment is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Apollo Senior and MFS Investment

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

The idea behind Apollo Senior Floating and MFS Investment Grade 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.