Correlation Between Apollo Senior and Nuveen Floating

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

Diversification Opportunities for Apollo Senior and Nuveen Floating

0.7

Correlation Coefficient

Apollo Senior  Nuveen Floating

Poor diversification

The 3 months correlation between Apollo and Nuveen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Senior Floating and Nuveen Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Floating Rate 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 Nuveen Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Floating Rate has no effect on the direction of Apollo Senior i.e., Apollo Senior and Nuveen Floating go up and down completely randomly.

Pair Corralation between Apollo Senior and Nuveen Floating

Considering the 90-day investment horizon Apollo Senior Floating is expected to generate 0.93 times more return on investment than Nuveen Floating. However, Apollo Senior Floating is 1.07 times less risky than Nuveen Floating. It trades about 0.14 of its potential returns per unit of risk. Nuveen Floating Rate is currently generating about 0.1 per unit of risk. If you would invest  1,024  in Apollo Senior Floating on September 4, 2024 and sell it today you would earn a total of  462.00  from holding Apollo Senior Floating or generate 45.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	81.01%
Values	Daily Returns

Apollo Senior Floating  vs.  Nuveen Floating Rate

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.

Nuveen Floating Rate

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Floating Rate are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable technical and fundamental indicators, Nuveen Floating is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Apollo Senior and Nuveen Floating

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

The idea behind Apollo Senior Floating and Nuveen Floating Rate 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.