Correlation Between Invesco Pennsylvania and Apollo Senior

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

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

Diversification Opportunities for Invesco Pennsylvania and Apollo Senior

0.13

Correlation Coefficient

Invesco Pennsylvania  Apollo Senior

Average diversification

The 3 months correlation between Invesco and Apollo is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Pennsylvania Value and Apollo Senior Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Senior Floating and Invesco Pennsylvania 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 Invesco Pennsylvania Value are associated (or correlated) with Apollo Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Senior Floating has no effect on the direction of Invesco Pennsylvania i.e., Invesco Pennsylvania and Apollo Senior go up and down completely randomly.

Pair Corralation between Invesco Pennsylvania and Apollo Senior

Considering the 90-day investment horizon Invesco Pennsylvania is expected to generate 2.3 times less return on investment than Apollo Senior. In addition to that, Invesco Pennsylvania is 1.13 times more volatile than Apollo Senior Floating. It trades about 0.06 of its total potential returns per unit of risk. Apollo Senior Floating is currently generating about 0.15 per unit of volatility. 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	Insignificant
Accuracy	79.39%
Values	Daily Returns

Invesco Pennsylvania Value  vs.  Apollo Senior Floating

Invesco Pennsylvania

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Pennsylvania Value has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Invesco Pennsylvania is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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.

Pair Trading with Invesco Pennsylvania and Apollo Senior

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

The idea behind Invesco Pennsylvania Value and Apollo Senior Floating 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.