Correlation Between Robinhood Markets and Apple
Can any of the company-specific risk be diversified away by investing in both Robinhood Markets 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 Robinhood Markets and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Robinhood Markets and Apple Inc, you can compare the effects of market volatilities on Robinhood Markets 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 Robinhood Markets with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robinhood Markets and Apple.
Diversification Opportunities for Robinhood Markets and Apple
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Robinhood and Apple is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Robinhood Markets and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Robinhood Markets 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 Robinhood Markets 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 Robinhood Markets i.e., Robinhood Markets and Apple go up and down completely randomly.
Pair Corralation between Robinhood Markets and Apple
Assuming the 90 days horizon Robinhood Markets is expected to generate 3.65 times more return on investment than Apple. However, Robinhood Markets is 3.65 times more volatile than Apple Inc. It trades about 0.21 of its potential returns per unit of risk. Apple Inc is currently generating about 0.56 per unit of risk. If you would invest 3,100 in Robinhood Markets on September 13, 2024 and sell it today you would earn a total of 516.00 from holding Robinhood Markets or generate 16.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Robinhood Markets vs. Apple Inc
Performance |
| Timeline |
| Robinhood Markets |
| Apple Inc |
Robinhood Markets and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Robinhood Markets and Apple
The main advantage of trading using opposite Robinhood Markets and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robinhood Markets 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.| Robinhood Markets vs. EVS Broadcast Equipment | Robinhood Markets vs. COPLAND ROAD CAPITAL | Robinhood Markets vs. Sterling Construction | Robinhood Markets vs. Texas Roadhouse |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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