Correlation Between Apple and Koninklijke Ahold
Can any of the company-specific risk be diversified away by investing in both Apple and Koninklijke Ahold 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 Koninklijke Ahold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Apple and Koninklijke Ahold 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 Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Koninklijke Ahold.
Diversification Opportunities for Apple and Koninklijke Ahold
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and Koninklijke is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold 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 Koninklijke Ahold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Ahold has no effect on the direction of Apple i.e., Apple and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Apple and Koninklijke Ahold
Given the investment horizon of 90 days Apple is expected to generate 1.07 times less return on investment than Koninklijke Ahold. In addition to that, Apple is 1.21 times more volatile than Koninklijke Ahold Delhaize. It trades about 0.08 of its total potential returns per unit of risk. Koninklijke Ahold Delhaize is currently generating about 0.1 per unit of volatility. If you would invest 2,913 in Koninklijke Ahold Delhaize on September 2, 2024 and sell it today you would earn a total of 553.00 from holding Koninklijke Ahold Delhaize or generate 18.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.05% |
| Values | Daily Returns |
Apple Inc vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Apple Inc |
| Koninklijke Ahold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Apple and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Koninklijke Ahold
The main advantage of trading using opposite Apple and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Koninklijke Ahold 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 Koninklijke Ahold will offset losses from the drop in Koninklijke Ahold's long position.| Apple vs. Rigetti Computing | Apple vs. D Wave Quantum | Apple vs. Desktop Metal | Apple vs. Quantum Computing |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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