Correlation Between Apple and NeuPath Health
Can any of the company-specific risk be diversified away by investing in both Apple and NeuPath Health 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 NeuPath Health 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 NeuPath Health, you can compare the effects of market volatilities on Apple and NeuPath Health 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 NeuPath Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and NeuPath Health.
Diversification Opportunities for Apple and NeuPath Health
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Apple and NeuPath is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and NeuPath Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeuPath Health 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 NeuPath Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeuPath Health has no effect on the direction of Apple i.e., Apple and NeuPath Health go up and down completely randomly.
Pair Corralation between Apple and NeuPath Health
Assuming the 90 days trading horizon Apple is expected to generate 2.47 times less return on investment than NeuPath Health. But when comparing it to its historical volatility, Apple Inc CDR is 3.8 times less risky than NeuPath Health. It trades about 0.07 of its potential returns per unit of risk. NeuPath Health is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 14.00 in NeuPath Health on November 5, 2024 and sell it today you would earn a total of 8.00 from holding NeuPath Health or generate 57.14% 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. NeuPath Health
Performance |
| Timeline |
| Apple Inc CDR |
| NeuPath Health |
Apple and NeuPath Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and NeuPath Health
The main advantage of trading using opposite Apple and NeuPath Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, NeuPath Health 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 NeuPath Health will offset losses from the drop in NeuPath Health's long position.| Apple vs. Pollard Banknote Limited | Apple vs. HPQ Silicon Resources | Apple vs. Fairfax Financial Holdings | Apple vs. Northstar Clean Technologies |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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