Correlation Between AVITA Medical and Apple
Can any of the company-specific risk be diversified away by investing in both AVITA Medical 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 AVITA Medical and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVITA Medical and Apple Inc, you can compare the effects of market volatilities on AVITA Medical 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 AVITA Medical with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVITA Medical and Apple.
Diversification Opportunities for AVITA Medical and Apple
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AVITA and Apple is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding AVITA Medical and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and AVITA Medical 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 AVITA Medical 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 AVITA Medical i.e., AVITA Medical and Apple go up and down completely randomly.
Pair Corralation between AVITA Medical and Apple
Assuming the 90 days trading horizon AVITA Medical is expected to generate 2.69 times more return on investment than Apple. However, AVITA Medical is 2.69 times more volatile than Apple Inc. It trades about 0.09 of its potential returns per unit of risk. Apple Inc is currently generating about 0.14 per unit of risk. If you would invest 162.00 in AVITA Medical on September 3, 2024 and sell it today you would earn a total of 78.00 from holding AVITA Medical or generate 48.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVITA Medical vs. Apple Inc
Performance |
| Timeline |
| AVITA Medical |
| Apple Inc |
AVITA Medical and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVITA Medical and Apple
The main advantage of trading using opposite AVITA Medical and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVITA Medical 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.| AVITA Medical vs. Tradeweb Markets | AVITA Medical vs. Mitsui Chemicals | AVITA Medical vs. The Trade Desk | AVITA Medical vs. USWE SPORTS AB |
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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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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