Correlation Between Apple and Emera
Can any of the company-specific risk be diversified away by investing in both Apple and Emera 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 Emera 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 Emera Inc, you can compare the effects of market volatilities on Apple and Emera 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 Emera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Emera.
Diversification Opportunities for Apple and Emera
Weak diversification
The 3 months correlation between Apple and Emera is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Emera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Inc 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 Emera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Inc has no effect on the direction of Apple i.e., Apple and Emera go up and down completely randomly.
Pair Corralation between Apple and Emera
Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 1.74 times more return on investment than Emera. However, Apple is 1.74 times more volatile than Emera Inc. It trades about 0.13 of its potential returns per unit of risk. Emera Inc is currently generating about 0.06 per unit of risk. If you would invest 3,270 in Apple Inc CDR on September 12, 2024 and sell it today you would earn a total of 342.00 from holding Apple Inc CDR or generate 10.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc CDR vs. Emera Inc
Performance |
| Timeline |
| Apple Inc CDR |
| Emera Inc |
Apple and Emera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Emera
The main advantage of trading using opposite Apple and Emera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Emera 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 Emera will offset losses from the drop in Emera's long position.| Apple vs. NeXGold Mining Corp | Apple vs. Tree Island Steel | Apple vs. North American Construction | Apple vs. DIRTT Environmental Solutions |
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.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |