Correlation Between Apple and Touchstone Exploration
Can any of the company-specific risk be diversified away by investing in both Apple and Touchstone Exploration 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 Touchstone Exploration 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 Touchstone Exploration, you can compare the effects of market volatilities on Apple and Touchstone Exploration 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 Touchstone Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Touchstone Exploration.
Diversification Opportunities for Apple and Touchstone Exploration
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Apple and Touchstone is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Touchstone Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Exploration 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 Touchstone Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Exploration has no effect on the direction of Apple i.e., Apple and Touchstone Exploration go up and down completely randomly.
Pair Corralation between Apple and Touchstone Exploration
Assuming the 90 days trading horizon Apple Inc CDR is expected to under-perform the Touchstone Exploration. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc CDR is 4.24 times less risky than Touchstone Exploration. The stock trades about -0.03 of its potential returns per unit of risk. The Touchstone Exploration is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Touchstone Exploration on October 9, 2024 and sell it today you would earn a total of 5.00 from holding Touchstone Exploration or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc CDR vs. Touchstone Exploration
Performance |
| Timeline |
| Apple Inc CDR |
| Touchstone Exploration |
Apple and Touchstone Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Touchstone Exploration
The main advantage of trading using opposite Apple and Touchstone Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Touchstone Exploration 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 Touchstone Exploration will offset losses from the drop in Touchstone Exploration's long position.| Apple vs. Caribbean Utilities | Apple vs. Earth Alive Clean | Apple vs. Mako Mining Corp | Apple vs. Globex Mining Enterprises |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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