Correlation Between Apple and Premium Income
Can any of the company-specific risk be diversified away by investing in both Apple and Premium Income 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 Premium Income 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 Premium Income, you can compare the effects of market volatilities on Apple and Premium Income 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 Premium Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Premium Income.
Diversification Opportunities for Apple and Premium Income
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apple and Premium is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Premium Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premium Income 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 Premium Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premium Income has no effect on the direction of Apple i.e., Apple and Premium Income go up and down completely randomly.
Pair Corralation between Apple and Premium Income
Assuming the 90 days trading horizon Apple is expected to generate 8.31 times less return on investment than Premium Income. But when comparing it to its historical volatility, Apple Inc CDR is 6.83 times less risky than Premium Income. It trades about 0.08 of its potential returns per unit of risk. Premium Income is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 155.00 in Premium Income on August 25, 2024 and sell it today you would earn a total of 466.00 from holding Premium Income or generate 300.65% 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. Premium Income
Performance |
| Timeline |
| Apple Inc CDR |
| Premium Income |
Apple and Premium Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Premium Income
The main advantage of trading using opposite Apple and Premium Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Premium Income 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 Premium Income will offset losses from the drop in Premium Income's long position.| Apple vs. MTY Food Group | Apple vs. Nicola Mining | Apple vs. Metalero Mining Corp | Apple vs. Maple Leaf Foods |
| Premium Income vs. NVIDIA CDR | Premium Income vs. Apple Inc CDR | Premium Income vs. Microsoft Corp CDR | Premium Income 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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