Correlation Between Apollo Global and Kayne Anderson
Can any of the company-specific risk be diversified away by investing in both Apollo Global and Kayne Anderson 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 Kayne Anderson 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 Kayne Anderson MLP, you can compare the effects of market volatilities on Apollo Global and Kayne Anderson 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 Kayne Anderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Global and Kayne Anderson.
Diversification Opportunities for Apollo Global and Kayne Anderson
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apollo and Kayne is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Kayne Anderson MLP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kayne Anderson MLP 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 Kayne Anderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kayne Anderson MLP has no effect on the direction of Apollo Global i.e., Apollo Global and Kayne Anderson go up and down completely randomly.
Pair Corralation between Apollo Global and Kayne Anderson
Assuming the 90 days trading horizon Apollo Global Management is expected to generate 1.49 times more return on investment than Kayne Anderson. However, Apollo Global is 1.49 times more volatile than Kayne Anderson MLP. It trades about 0.14 of its potential returns per unit of risk. Kayne Anderson MLP is currently generating about 0.17 per unit of risk. If you would invest 4,660 in Apollo Global Management on September 1, 2024 and sell it today you would earn a total of 4,608 from holding Apollo Global Management or generate 98.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 88.98% |
| Values | Daily Returns |
Apollo Global Management vs. Kayne Anderson MLP
Performance |
| Timeline |
| Apollo Global Management |
| Kayne Anderson MLP |
Apollo Global and Kayne Anderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Global and Kayne Anderson
The main advantage of trading using opposite Apollo Global and Kayne Anderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Global position performs unexpectedly, Kayne Anderson 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 Kayne Anderson will offset losses from the drop in Kayne Anderson's long position.| Apollo Global vs. Citizens | Apollo Global vs. United Fire Group | Apollo Global vs. Uber Technologies | Apollo Global vs. Western Digital |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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