Correlation Between Apple and Agfa-Gevaert
Can any of the company-specific risk be diversified away by investing in both Apple and Agfa-Gevaert 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 Agfa-Gevaert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Agfa Gevaert NV, you can compare the effects of market volatilities on Apple and Agfa-Gevaert 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 Agfa-Gevaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Agfa-Gevaert.
Diversification Opportunities for Apple and Agfa-Gevaert
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and Agfa-Gevaert is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Agfa Gevaert NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agfa Gevaert NV 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 Agfa-Gevaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agfa Gevaert NV has no effect on the direction of Apple i.e., Apple and Agfa-Gevaert go up and down completely randomly.
Pair Corralation between Apple and Agfa-Gevaert
Given the investment horizon of 90 days Apple Inc is expected to generate 0.51 times more return on investment than Agfa-Gevaert. However, Apple Inc is 1.97 times less risky than Agfa-Gevaert. It trades about 0.08 of its potential returns per unit of risk. Agfa Gevaert NV is currently generating about -0.09 per unit of risk. If you would invest 14,396 in Apple Inc on September 3, 2024 and sell it today you would earn a total of 9,337 from holding Apple Inc or generate 64.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Agfa Gevaert NV
Performance |
| Timeline |
| Apple Inc |
| Agfa Gevaert NV |
Apple and Agfa-Gevaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Agfa-Gevaert
The main advantage of trading using opposite Apple and Agfa-Gevaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Agfa-Gevaert 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 Agfa-Gevaert will offset losses from the drop in Agfa-Gevaert's long position.The idea behind Apple Inc and Agfa Gevaert NV 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.| Agfa-Gevaert vs. Enerpac Tool Group | Agfa-Gevaert vs. Omega Flex | Agfa-Gevaert vs. Luxfer Holdings PLC | Agfa-Gevaert vs. Gorman Rupp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |