Correlation Between IShares Asia and Apollo Tactical

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

By analyzing existing cross correlation between iShares Asia 50 and Apollo Tactical Income, you can compare the effects of market volatilities on IShares Asia 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 IShares Asia with a short position of Apollo Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Asia and Apollo Tactical.

Diversification Opportunities for IShares Asia and Apollo Tactical

0.14

Correlation Coefficient

IShares Asia  Apollo Tactical

Average diversification

The 3 months correlation between IShares and Apollo is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding iShares Asia 50 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 IShares Asia 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 iShares Asia 50 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 IShares Asia i.e., IShares Asia and Apollo Tactical go up and down completely randomly.

Pair Corralation between IShares Asia and Apollo Tactical

If you would invest  6,598  in iShares Asia 50 on September 14, 2024 and sell it today you would earn a total of  475.00  from holding iShares Asia 50 or generate 7.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

iShares Asia 50  vs.  Apollo Tactical Income

iShares Asia 50

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Asia 50 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile forward indicators, IShares Asia may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 IShares Asia and Apollo Tactical

The main advantage of trading using opposite IShares Asia and Apollo Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Asia 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 iShares Asia 50 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.