Correlation Between Flow Traders and Apple
Can any of the company-specific risk be diversified away by investing in both Flow Traders and Apple 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 Flow Traders and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Traders NV and Apple Inc, you can compare the effects of market volatilities on Flow Traders and Apple 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 Flow Traders with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and Apple.
Diversification Opportunities for Flow Traders and Apple
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flow and Apple is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders NV and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Flow Traders 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 Flow Traders NV are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Flow Traders i.e., Flow Traders and Apple go up and down completely randomly.
Pair Corralation between Flow Traders and Apple
Assuming the 90 days trading horizon Flow Traders is expected to generate 161.9 times less return on investment than Apple. But when comparing it to its historical volatility, Flow Traders NV is 54.13 times less risky than Apple. It trades about 0.04 of its potential returns per unit of risk. Apple Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 19,826 in Apple Inc on September 3, 2024 and sell it today you would lose (19,586) from holding Apple Inc or give up 98.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Flow Traders NV vs. Apple Inc
Performance |
| Timeline |
| Flow Traders NV |
| Apple Inc |
Flow Traders and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and Apple
The main advantage of trading using opposite Flow Traders and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Flow Traders vs. Check Point Software | Flow Traders vs. SMA Solar Technology | Flow Traders vs. Microchip Technology | Flow Traders vs. Uber Technologies |
| Apple vs. AIM ImmunoTech | Apple vs. Celebrus Technologies plc | Apple vs. European Metals Holdings | Apple vs. Capital Metals PLC |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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