Correlation Between MFS High and Apollo Tactical

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

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

Diversification Opportunities for MFS High and Apollo Tactical

-0.46

Correlation Coefficient

MFS High  Apollo Tactical

Very good diversification

The 3 months correlation between MFS and Apollo is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding MFS High Income and Apollo Tactical Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Tactical Income and MFS High 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 MFS High Income are associated (or correlated) with Apollo Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Tactical Income has no effect on the direction of MFS High i.e., MFS High and Apollo Tactical go up and down completely randomly.

Pair Corralation between MFS High and Apollo Tactical

If you would invest  373.00  in MFS High Income on September 5, 2024 and sell it today you would earn a total of  13.00  from holding MFS High Income or generate 3.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.18%
Values	Daily Returns

MFS High Income  vs.  Apollo Tactical Income

MFS High Income

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MFS High Income are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, MFS High is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Apollo Tactical Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Tactical Income has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable forward indicators, Apollo Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MFS High and Apollo Tactical

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

The idea behind MFS High Income and Apollo Tactical Income 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.