Correlation Between Apple and Wilmington Capital
Can any of the company-specific risk be diversified away by investing in both Apple and Wilmington Capital 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 Wilmington Capital 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 Wilmington Capital Management, you can compare the effects of market volatilities on Apple and Wilmington Capital 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 Wilmington Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Wilmington Capital.
Diversification Opportunities for Apple and Wilmington Capital
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and Wilmington is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Wilmington Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Capital 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 Wilmington Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Capital has no effect on the direction of Apple i.e., Apple and Wilmington Capital go up and down completely randomly.
Pair Corralation between Apple and Wilmington Capital
Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 0.36 times more return on investment than Wilmington Capital. However, Apple Inc CDR is 2.76 times less risky than Wilmington Capital. It trades about 0.09 of its potential returns per unit of risk. Wilmington Capital Management is currently generating about 0.03 per unit of risk. If you would invest 1,899 in Apple Inc CDR on August 26, 2024 and sell it today you would earn a total of 1,469 from holding Apple Inc CDR or generate 77.36% 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. Wilmington Capital Management
Performance |
| Timeline |
| Apple Inc CDR |
| Wilmington Capital |
Apple and Wilmington Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Wilmington Capital
The main advantage of trading using opposite Apple and Wilmington Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Wilmington Capital 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 Wilmington Capital will offset losses from the drop in Wilmington Capital's long position.| Apple vs. Data Communications Management | Apple vs. Toronto Dominion Bank | Apple vs. Firan Technology Group | Apple vs. Algonquin Power Utilities |
| Wilmington Capital vs. NVIDIA CDR | Wilmington Capital vs. Apple Inc CDR | Wilmington Capital vs. Microsoft Corp CDR | Wilmington Capital 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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