Correlation Between Apollo Global and Daikin IndustriesLtd

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

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

Diversification Opportunities for Apollo Global and Daikin IndustriesLtd

0.65

Correlation Coefficient

Apollo Global  Daikin IndustriesLtd

Poor diversification

The 3 months correlation between Apollo and Daikin is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Daikin IndustriesLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daikin IndustriesLtd and Apollo Global 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 Apollo Global Management are associated (or correlated) with Daikin IndustriesLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daikin IndustriesLtd has no effect on the direction of Apollo Global i.e., Apollo Global and Daikin IndustriesLtd go up and down completely randomly.

Pair Corralation between Apollo Global and Daikin IndustriesLtd

Considering the 90-day investment horizon Apollo Global is expected to generate 3.59 times less return on investment than Daikin IndustriesLtd. But when comparing it to its historical volatility, Apollo Global Management is 1.73 times less risky than Daikin IndustriesLtd. It trades about 0.04 of its potential returns per unit of risk. Daikin IndustriesLtd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  11,497  in Daikin IndustriesLtd on May 5, 2025 and sell it today you would earn a total of  1,665  from holding Daikin IndustriesLtd or generate 14.48% return on investment over 90 days.

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

Apollo Global Management  vs.  Daikin IndustriesLtd

Apollo Global Management

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Management are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Apollo Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Daikin IndustriesLtd

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Daikin IndustriesLtd are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent essential indicators, Daikin IndustriesLtd reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apollo Global and Daikin IndustriesLtd

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

The idea behind Apollo Global Management and Daikin IndustriesLtd 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.