Correlation Between Apple and Spin Master
Can any of the company-specific risk be diversified away by investing in both Apple and Spin Master 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 Spin Master 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 Spin Master Corp, you can compare the effects of market volatilities on Apple and Spin Master 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 Spin Master. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Spin Master.
Diversification Opportunities for Apple and Spin Master
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apple and Spin is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Spin Master Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spin Master 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 Spin Master. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spin Master Corp has no effect on the direction of Apple i.e., Apple and Spin Master go up and down completely randomly.
Pair Corralation between Apple and Spin Master
Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 0.49 times more return on investment than Spin Master. However, Apple Inc CDR is 2.06 times less risky than Spin Master. It trades about 0.64 of its potential returns per unit of risk. Spin Master Corp is currently generating about 0.29 per unit of risk. If you would invest 3,290 in Apple Inc CDR on September 12, 2024 and sell it today you would earn a total of 340.00 from holding Apple Inc CDR or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Apple Inc CDR vs. Spin Master Corp
Performance |
| Timeline |
| Apple Inc CDR |
| Spin Master Corp |
Apple and Spin Master Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Spin Master
The main advantage of trading using opposite Apple and Spin Master positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Spin Master 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 Spin Master will offset losses from the drop in Spin Master's long position.| Apple vs. Doman Building Materials | Apple vs. Identillect Technologies Corp | Apple vs. NeXGold Mining Corp | Apple vs. Oculus VisionTech |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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