Correlation Between Apple and Everyday People
Can any of the company-specific risk be diversified away by investing in both Apple and Everyday People 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 Everyday People 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 Everyday People Financial, you can compare the effects of market volatilities on Apple and Everyday People 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 Everyday People. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Everyday People.
Diversification Opportunities for Apple and Everyday People
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apple and Everyday is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Everyday People Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everyday People Financial 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 Everyday People. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everyday People Financial has no effect on the direction of Apple i.e., Apple and Everyday People go up and down completely randomly.
Pair Corralation between Apple and Everyday People
Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 0.31 times more return on investment than Everyday People. However, Apple Inc CDR is 3.18 times less risky than Everyday People. It trades about -0.03 of its potential returns per unit of risk. Everyday People Financial is currently generating about -0.06 per unit of risk. If you would invest 3,396 in Apple Inc CDR on August 26, 2024 and sell it today you would lose (28.00) from holding Apple Inc CDR or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc CDR vs. Everyday People Financial
Performance |
| Timeline |
| Apple Inc CDR |
| Everyday People Financial |
Apple and Everyday People Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Everyday People
The main advantage of trading using opposite Apple and Everyday People positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Everyday People 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 Everyday People will offset losses from the drop in Everyday People's long position.| Apple vs. Data Communications Management | Apple vs. Toronto Dominion Bank | Apple vs. Firan Technology Group | Apple vs. Algonquin Power Utilities |
| Everyday People vs. NVIDIA CDR | Everyday People vs. Apple Inc CDR | Everyday People vs. Microsoft Corp CDR | Everyday People vs. Amazon CDR |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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