Correlation Between Apple and Questor Technology
Can any of the company-specific risk be diversified away by investing in both Apple and Questor Technology 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 Questor Technology 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 Questor Technology, you can compare the effects of market volatilities on Apple and Questor Technology 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 Questor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Questor Technology.
Diversification Opportunities for Apple and Questor Technology
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and Questor is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Questor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Questor Technology 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 Questor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Questor Technology has no effect on the direction of Apple i.e., Apple and Questor Technology go up and down completely randomly.
Pair Corralation between Apple and Questor Technology
Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 0.38 times more return on investment than Questor Technology. However, Apple Inc CDR is 2.66 times less risky than Questor Technology. It trades about 0.07 of its potential returns per unit of risk. Questor Technology is currently generating about -0.05 per unit of risk. If you would invest 2,172 in Apple Inc CDR on September 3, 2024 and sell it today you would earn a total of 1,303 from holding Apple Inc CDR or generate 59.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc CDR vs. Questor Technology
Performance |
| Timeline |
| Apple Inc CDR |
| Questor Technology |
Apple and Questor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Questor Technology
The main advantage of trading using opposite Apple and Questor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Questor Technology 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 Questor Technology will offset losses from the drop in Questor Technology's long position.| Apple vs. Canaf Investments | Apple vs. Brookfield Office Properties | Apple vs. Eddy Smart Home | Apple vs. Canso Select Opportunities |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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