Correlation Between Apollo Investment and Tianjin Capital

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

By analyzing existing cross correlation between Apollo Investment Corp and Tianjin Capital Environmental, you can compare the effects of market volatilities on Apollo Investment and Tianjin Capital 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 Investment with a short position of Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Tianjin Capital.

Diversification Opportunities for Apollo Investment and Tianjin Capital

0.47

Correlation Coefficient

Apollo Investment  Tianjin Capital

Very weak diversification

The 3 months correlation between Apollo and Tianjin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi and Apollo Investment 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 Investment Corp are associated (or correlated) with Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of Apollo Investment i.e., Apollo Investment and Tianjin Capital go up and down completely randomly.

Pair Corralation between Apollo Investment and Tianjin Capital

Assuming the 90 days trading horizon Apollo Investment is expected to generate 2.05 times less return on investment than Tianjin Capital. But when comparing it to its historical volatility, Apollo Investment Corp is 1.35 times less risky than Tianjin Capital. It trades about 0.17 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  33.00  in Tianjin Capital Environmental on April 24, 2025 and sell it today you would earn a total of  10.00  from holding Tianjin Capital Environmental or generate 30.3% return on investment over 90 days.

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

Apollo Investment Corp  vs.  Tianjin Capital Environmental

Apollo Investment Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Investment Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Apollo Investment reported solid returns over the last few months and may actually be approaching a breakup point.

Tianjin Capital Envi

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tianjin Capital Environmental are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Tianjin Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apollo Investment and Tianjin Capital

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

The idea behind Apollo Investment Corp and Tianjin Capital Environmental 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.