Correlation Between LIFE + and Apple
Can any of the company-specific risk be diversified away by investing in both LIFE + 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 LIFE + and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFE BANC SPLIT and Apple Inc, you can compare the effects of market volatilities on LIFE + 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 LIFE + with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFE + and Apple.
Diversification Opportunities for LIFE + and Apple
Poor diversification
The 3 months correlation between LIFE and Apple is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding LIFE BANC SPLIT and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and LIFE + 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 LIFE BANC SPLIT 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 LIFE + i.e., LIFE + and Apple go up and down completely randomly.
Pair Corralation between LIFE + and Apple
Assuming the 90 days horizon LIFE + is expected to generate 1.07 times less return on investment than Apple. In addition to that, LIFE + is 1.94 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 0.07 per unit of volatility. If you would invest 13,765 in Apple Inc on August 25, 2024 and sell it today you would earn a total of 8,310 from holding Apple Inc or generate 60.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFE BANC SPLIT vs. Apple Inc
Performance |
| Timeline |
| LIFE BANC SPLIT |
| Apple Inc |
LIFE + and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFE + and Apple
The main advantage of trading using opposite LIFE + and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFE + 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.| LIFE + vs. Geely Automobile Holdings | LIFE + vs. UMC Electronics Co | LIFE + vs. METHODE ELECTRONICS | LIFE + vs. KIMBALL ELECTRONICS |
| Apple vs. Perdoceo Education | Apple vs. UNITED UTILITIES GR | Apple vs. Federal Agricultural Mortgage | Apple vs. North American Construction |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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