Correlation Between Apollo Senior and First Trust

Can any of the company-specific risk be diversified away by investing in both Apollo Senior and First Trust 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 First Trust 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 First Trust Senior, you can compare the effects of market volatilities on Apollo Senior and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Senior and First Trust.

Diversification Opportunities for Apollo Senior and First Trust

0.0

Correlation Coefficient

Apollo Senior  First Trust

Pay attention - limited upside

The 3 months correlation between Apollo and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Senior Floating and First Trust Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Senior 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Senior has no effect on the direction of Apollo Senior i.e., Apollo Senior and First Trust go up and down completely randomly.

Pair Corralation between Apollo Senior and First Trust

If you would invest  1,017  in First Trust Senior on December 27, 2024 and sell it today you would earn a total of  4.00  from holding First Trust Senior or generate 0.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Apollo Senior Floating  vs.  First Trust Senior

Apollo Senior Floating

Risk-Adjusted Performance

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.

First Trust Senior

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Senior are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, First Trust is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Apollo Senior and First Trust

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

The idea behind Apollo Senior Floating and First Trust Senior 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.