Correlation Between Apple and Aker BP
Can any of the company-specific risk be diversified away by investing in both Apple and Aker BP 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 Aker BP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Aker BP ASA, you can compare the effects of market volatilities on Apple and Aker BP 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 Aker BP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Aker BP.
Diversification Opportunities for Apple and Aker BP
Good diversification
The 3 months correlation between Apple and Aker is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Aker BP ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker BP ASA 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 Aker BP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker BP ASA has no effect on the direction of Apple i.e., Apple and Aker BP go up and down completely randomly.
Pair Corralation between Apple and Aker BP
Given the investment horizon of 90 days Apple Inc is expected to generate 0.39 times more return on investment than Aker BP. However, Apple Inc is 2.58 times less risky than Aker BP. It trades about 0.06 of its potential returns per unit of risk. Aker BP ASA is currently generating about 0.02 per unit of risk. If you would invest 18,241 in Apple Inc on September 2, 2024 and sell it today you would earn a total of 5,492 from holding Apple Inc or generate 30.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Aker BP ASA
Performance |
| Timeline |
| Apple Inc |
| Aker BP ASA |
Apple and Aker BP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Aker BP
The main advantage of trading using opposite Apple and Aker BP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Aker BP 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 Aker BP will offset losses from the drop in Aker BP's long position.| Apple vs. Rigetti Computing | Apple vs. D Wave Quantum | Apple vs. Desktop Metal | Apple vs. Quantum Computing |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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