Correlation Between Apple and Cho Bi
Can any of the company-specific risk be diversified away by investing in both Apple and Cho Bi 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 Cho Bi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Cho Bi Co, you can compare the effects of market volatilities on Apple and Cho Bi 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 Cho Bi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Cho Bi.
Diversification Opportunities for Apple and Cho Bi
Modest diversification
The 3 months correlation between Apple and Cho is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Cho Bi Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cho Bi 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 are associated (or correlated) with Cho Bi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cho Bi has no effect on the direction of Apple i.e., Apple and Cho Bi go up and down completely randomly.
Pair Corralation between Apple and Cho Bi
Given the investment horizon of 90 days Apple Inc is expected to generate 0.89 times more return on investment than Cho Bi. However, Apple Inc is 1.13 times less risky than Cho Bi. It trades about 0.07 of its potential returns per unit of risk. Cho Bi Co is currently generating about -0.04 per unit of risk. If you would invest 18,849 in Apple Inc on November 3, 2024 and sell it today you would earn a total of 4,751 from holding Apple Inc or generate 25.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.56% |
| Values | Daily Returns |
Apple Inc vs. Cho Bi Co
Performance |
| Timeline |
| Apple Inc |
| Cho Bi |
Apple and Cho Bi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Cho Bi
The main advantage of trading using opposite Apple and Cho Bi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Cho Bi 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 Cho Bi will offset losses from the drop in Cho Bi's long position.The idea behind Apple Inc and Cho Bi Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cho Bi vs. DB Financial Investment | Cho Bi vs. Mobile Appliance | Cho Bi vs. Incar Financial Service | Cho Bi vs. Lotte Data Communication |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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