Correlation Between First Investors and Ivy Apollo

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

By analyzing existing cross correlation between First Investors Covered and Ivy Apollo Multi Asset, you can compare the effects of market volatilities on First Investors and Ivy Apollo 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 First Investors with a short position of Ivy Apollo. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Investors and Ivy Apollo.

Diversification Opportunities for First Investors and Ivy Apollo

-0.27

Correlation Coefficient

First Investors  Ivy Apollo

Very good diversification

The 3 months correlation between First and Ivy is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding First Investors Covered and Ivy Apollo Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Apollo Multi and First Investors 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 First Investors Covered are associated (or correlated) with Ivy Apollo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Apollo Multi has no effect on the direction of First Investors i.e., First Investors and Ivy Apollo go up and down completely randomly.

Pair Corralation between First Investors and Ivy Apollo

Assuming the 90 days horizon First Investors Covered is expected to under-perform the Ivy Apollo. In addition to that, First Investors is 14.58 times more volatile than Ivy Apollo Multi Asset. It trades about -0.12 of its total potential returns per unit of risk. Ivy Apollo Multi Asset is currently generating about 0.12 per unit of volatility. If you would invest  925.00  in Ivy Apollo Multi Asset on February 17, 2024 and sell it today you would earn a total of  46.00  from holding Ivy Apollo Multi Asset or generate 4.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

First Investors Covered  vs.  Ivy Apollo Multi Asset

First Investors Covered

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Investors Covered has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the fund investors.

Ivy Apollo Multi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ivy Apollo Multi Asset are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ivy Apollo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with First Investors and Ivy Apollo

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

The idea behind First Investors Covered and Ivy Apollo Multi Asset 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.