Correlation Between Enter Air and Apple
Can any of the company-specific risk be diversified away by investing in both Enter Air 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 Enter Air and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enter Air SA and Apple Inc, you can compare the effects of market volatilities on Enter Air 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 Enter Air with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enter Air and Apple.
Diversification Opportunities for Enter Air and Apple
Modest diversification
The 3 months correlation between Enter and Apple is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Enter Air SA and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Enter Air 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 Enter Air SA 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 Enter Air i.e., Enter Air and Apple go up and down completely randomly.
Pair Corralation between Enter Air and Apple
Assuming the 90 days trading horizon Enter Air is expected to generate 1.44 times less return on investment than Apple. In addition to that, Enter Air is 7.53 times more volatile than Apple Inc. It trades about 0.03 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.36 per unit of volatility. If you would invest 20,575 in Apple Inc on September 1, 2024 and sell it today you would earn a total of 1,860 from holding Apple Inc or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enter Air SA vs. Apple Inc
Performance |
| Timeline |
| Enter Air SA |
| Apple Inc |
Enter Air and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enter Air and Apple
The main advantage of trading using opposite Enter Air and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enter Air 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.| Enter Air vs. AUSNUTRIA DAIRY | Enter Air vs. NIPPON MEAT PACKERS | Enter Air vs. Lifeway Foods | Enter Air vs. TreeHouse Foods |
| Apple vs. Enter Air SA | Apple vs. Wayside Technology Group | Apple vs. DELTA AIR LINES | Apple vs. Align Technology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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