Correlation Between NXG NextGen and Apollo Tactical

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

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

Diversification Opportunities for NXG NextGen and Apollo Tactical

0.0

Correlation Coefficient

NXG NextGen  Apollo Tactical

Pay attention - limited upside

The 3 months correlation between NXG and Apollo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NXG NextGen Infrastructure 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 NXG NextGen 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 NXG NextGen Infrastructure 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 NXG NextGen i.e., NXG NextGen and Apollo Tactical go up and down completely randomly.

Pair Corralation between NXG NextGen and Apollo Tactical

If you would invest  4,152  in NXG NextGen Infrastructure on December 23, 2024 and sell it today you would earn a total of  609.00  from holding NXG NextGen Infrastructure or generate 14.67% return on investment over 90 days.

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

NXG NextGen Infrastructure  vs.  Apollo Tactical Income

NXG NextGen Infrastr

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NXG NextGen Infrastructure are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, NXG NextGen reported solid returns over the last few months and may actually be approaching a breakup point.

Apollo Tactical Income

Risk-Adjusted Performance

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 NXG NextGen and Apollo Tactical

The main advantage of trading using opposite NXG NextGen and Apollo Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NXG NextGen 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 NXG NextGen Infrastructure 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.