Correlation Between Apple and Eddy Smart
Can any of the company-specific risk be diversified away by investing in both Apple and Eddy Smart 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 Apple and Eddy Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc CDR and Eddy Smart Home, you can compare the effects of market volatilities on Apple and Eddy Smart 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 Apple with a short position of Eddy Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Eddy Smart.
Diversification Opportunities for Apple and Eddy Smart
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and Eddy is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Eddy Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eddy Smart Home and Apple 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 Apple Inc CDR are associated (or correlated) with Eddy Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eddy Smart Home has no effect on the direction of Apple i.e., Apple and Eddy Smart go up and down completely randomly.
Pair Corralation between Apple and Eddy Smart
Assuming the 90 days trading horizon Apple is expected to generate 14.73 times less return on investment than Eddy Smart. But when comparing it to its historical volatility, Apple Inc CDR is 15.08 times less risky than Eddy Smart. It trades about 0.08 of its potential returns per unit of risk. Eddy Smart Home is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 200.00 in Eddy Smart Home on September 3, 2024 and sell it today you would earn a total of 55.00 from holding Eddy Smart Home or generate 27.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc CDR vs. Eddy Smart Home
Performance |
| Timeline |
| Apple Inc CDR |
| Eddy Smart Home |
Apple and Eddy Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Eddy Smart
The main advantage of trading using opposite Apple and Eddy Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Eddy Smart 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 Eddy Smart will offset losses from the drop in Eddy Smart's long position.| Apple vs. Canaf Investments | Apple vs. Brookfield Office Properties | Apple vs. Eddy Smart Home | Apple vs. Canso Select Opportunities |
| Eddy Smart vs. Enghouse Systems | Eddy Smart vs. Pulse Seismic | Eddy Smart vs. Harvest Global REIT | Eddy Smart vs. International Zeolite Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |