Correlation Between Apple and Onex Corp
Can any of the company-specific risk be diversified away by investing in both Apple and Onex Corp 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 Onex Corp 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 Onex Corp, you can compare the effects of market volatilities on Apple and Onex Corp 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 Onex Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Onex Corp.
Diversification Opportunities for Apple and Onex Corp
Weak diversification
The 3 months correlation between Apple and Onex is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Onex Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onex Corp 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 Onex Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onex Corp has no effect on the direction of Apple i.e., Apple and Onex Corp go up and down completely randomly.
Pair Corralation between Apple and Onex Corp
Assuming the 90 days trading horizon Apple is expected to generate 2.69 times less return on investment than Onex Corp. But when comparing it to its historical volatility, Apple Inc CDR is 2.25 times less risky than Onex Corp. It trades about 0.25 of its potential returns per unit of risk. Onex Corp is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 10,022 in Onex Corp on September 1, 2024 and sell it today you would earn a total of 1,367 from holding Onex Corp or generate 13.64% 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. Onex Corp
Performance |
| Timeline |
| Apple Inc CDR |
| Onex Corp |
Apple and Onex Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Onex Corp
The main advantage of trading using opposite Apple and Onex Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Onex Corp 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 Onex Corp will offset losses from the drop in Onex Corp's long position.The idea behind Apple Inc CDR and Onex Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Onex Corp vs. NovaGold Resources | Onex Corp vs. HPQ Silicon Resources | Onex Corp vs. Eastwood Bio Medical Canada | Onex Corp vs. Diamond Fields Resources |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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