Correlation Between Apple and International Metals
Can any of the company-specific risk be diversified away by investing in both Apple and International Metals 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 International Metals 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 International Metals Mining, you can compare the effects of market volatilities on Apple and International Metals 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 International Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and International Metals.
Diversification Opportunities for Apple and International Metals
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and International is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and International Metals Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Metals 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 International Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Metals has no effect on the direction of Apple i.e., Apple and International Metals go up and down completely randomly.
Pair Corralation between Apple and International Metals
Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 0.25 times more return on investment than International Metals. However, Apple Inc CDR is 3.93 times less risky than International Metals. It trades about -0.05 of its potential returns per unit of risk. International Metals Mining is currently generating about -0.05 per unit of risk. If you would invest 3,612 in Apple Inc CDR on October 12, 2024 and sell it today you would lose (45.00) from holding Apple Inc CDR or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Apple Inc CDR vs. International Metals Mining
Performance |
| Timeline |
| Apple Inc CDR |
| International Metals |
Apple and International Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and International Metals
The main advantage of trading using opposite Apple and International Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, International Metals 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 International Metals will offset losses from the drop in International Metals' long position.| Apple vs. Metalero Mining Corp | Apple vs. Gatos Silver | Apple vs. Ocumetics Technology Corp | Apple vs. Partners Value Investments |
| International Metals vs. Verizon Communications CDR | International Metals vs. Nova Leap Health | International Metals vs. Champion Iron | International Metals vs. UnitedHealth Group 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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