Correlation Between Apple and Shawcor
Can any of the company-specific risk be diversified away by investing in both Apple and Shawcor 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 Shawcor 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 Shawcor, you can compare the effects of market volatilities on Apple and Shawcor 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 Shawcor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Shawcor.
Diversification Opportunities for Apple and Shawcor
Very good diversification
The 3 months correlation between Apple and Shawcor is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Shawcor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shawcor 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 Shawcor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shawcor has no effect on the direction of Apple i.e., Apple and Shawcor go up and down completely randomly.
Pair Corralation between Apple and Shawcor
Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 0.47 times more return on investment than Shawcor. However, Apple Inc CDR is 2.12 times less risky than Shawcor. It trades about 0.08 of its potential returns per unit of risk. Shawcor is currently generating about -0.03 per unit of risk. If you would invest 3,190 in Apple Inc CDR on September 13, 2024 and sell it today you would earn a total of 422.00 from holding Apple Inc CDR or generate 13.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Apple Inc CDR vs. Shawcor
Performance |
| Timeline |
| Apple Inc CDR |
| Shawcor |
Apple and Shawcor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Shawcor
The main advantage of trading using opposite Apple and Shawcor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Shawcor 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 Shawcor will offset losses from the drop in Shawcor's long position.| Apple vs. NeXGold Mining Corp | Apple vs. Tree Island Steel | Apple vs. North American Construction | Apple vs. DIRTT Environmental Solutions |
| Shawcor vs. Constellation Software | Shawcor vs. Renoworks Software | Shawcor vs. Data Communications Management | Shawcor vs. Diamond Estates Wines |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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