Correlation Between SWISS WATER and Apple
Can any of the company-specific risk be diversified away by investing in both SWISS WATER 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 SWISS WATER and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and Apple Inc, you can compare the effects of market volatilities on SWISS WATER 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 SWISS WATER with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and Apple.
Diversification Opportunities for SWISS WATER and Apple
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SWISS and Apple is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and SWISS WATER 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 SWISS WATER DECAFFCOFFEE 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 SWISS WATER i.e., SWISS WATER and Apple go up and down completely randomly.
Pair Corralation between SWISS WATER and Apple
Assuming the 90 days horizon SWISS WATER is expected to generate 1.25 times less return on investment than Apple. In addition to that, SWISS WATER is 1.92 times more volatile than Apple Inc. It trades about 0.05 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.11 per unit of volatility. If you would invest 11,863 in Apple Inc on September 26, 2024 and sell it today you would earn a total of 12,637 from holding Apple Inc or generate 106.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. Apple Inc
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| Apple Inc |
SWISS WATER and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and Apple
The main advantage of trading using opposite SWISS WATER and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER 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.| SWISS WATER vs. Perdoceo Education | SWISS WATER vs. BORR DRILLING NEW | SWISS WATER vs. Adtalem Global Education | SWISS WATER vs. Strategic Education |
| Apple vs. Wizz Air Holdings | Apple vs. WIZZ AIR HLDGUNSPADR4 | Apple vs. Mitsubishi Gas Chemical | Apple vs. SWISS WATER DECAFFCOFFEE |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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