Correlation Between Apple and Urbana
Can any of the company-specific risk be diversified away by investing in both Apple and Urbana 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 Urbana 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 Urbana, you can compare the effects of market volatilities on Apple and Urbana 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 Urbana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Urbana.
Diversification Opportunities for Apple and Urbana
Modest diversification
The 3 months correlation between Apple and Urbana is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Urbana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urbana 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 Urbana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urbana has no effect on the direction of Apple i.e., Apple and Urbana go up and down completely randomly.
Pair Corralation between Apple and Urbana
Assuming the 90 days trading horizon Apple is expected to generate 1.58 times less return on investment than Urbana. But when comparing it to its historical volatility, Apple Inc CDR is 1.57 times less risky than Urbana. It trades about 0.06 of its potential returns per unit of risk. Urbana is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 386.00 in Urbana on August 31, 2024 and sell it today you would earn a total of 177.00 from holding Urbana or generate 45.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Apple Inc CDR vs. Urbana
Performance |
| Timeline |
| Apple Inc CDR |
| Urbana |
Apple and Urbana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Urbana
The main advantage of trading using opposite Apple and Urbana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Urbana 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 Urbana will offset losses from the drop in Urbana's long position.| Apple vs. Renoworks Software | Apple vs. AGF Management Limited | Apple vs. Sparx Technology | Apple vs. Data Communications Management |
| Urbana vs. Urbana | Urbana vs. Uniteds Limited | Urbana vs. Accord Financial Corp | Urbana vs. Clairvest Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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