Correlation Between Daikin IndustriesLtd and Runway Growth

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

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

Diversification Opportunities for Daikin IndustriesLtd and Runway Growth

0.58

Correlation Coefficient

Daikin IndustriesLtd  Runway Growth

Very weak diversification

The 3 months correlation between Daikin and Runway is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Daikin IndustriesLtd and Runway Growth Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Runway Growth Finance and Daikin IndustriesLtd 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 Daikin IndustriesLtd are associated (or correlated) with Runway Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Runway Growth Finance has no effect on the direction of Daikin IndustriesLtd i.e., Daikin IndustriesLtd and Runway Growth go up and down completely randomly.

Pair Corralation between Daikin IndustriesLtd and Runway Growth

Assuming the 90 days horizon Daikin IndustriesLtd is expected to generate 1.1 times less return on investment than Runway Growth. In addition to that, Daikin IndustriesLtd is 2.62 times more volatile than Runway Growth Finance. It trades about 0.07 of its total potential returns per unit of risk. Runway Growth Finance is currently generating about 0.22 per unit of volatility. If you would invest  875.00  in Runway Growth Finance on May 5, 2025 and sell it today you would earn a total of  185.00  from holding Runway Growth Finance or generate 21.14% return on investment over 90 days.

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

Daikin IndustriesLtd  vs.  Runway Growth Finance

Daikin IndustriesLtd

Risk-Adjusted Performance

Weak

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.

Runway Growth Finance

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Runway Growth Finance are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Runway Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Daikin IndustriesLtd and Runway Growth

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

The idea behind Daikin IndustriesLtd and Runway Growth Finance 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.