Correlation Between Apple and Country Group
Can any of the company-specific risk be diversified away by investing in both Apple and Country Group 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 Country Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Country Group Holdings, you can compare the effects of market volatilities on Apple and Country Group 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 Country Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Country Group.
Diversification Opportunities for Apple and Country Group
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Apple and Country is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Country Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Group Holdings 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 Country Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Group Holdings has no effect on the direction of Apple i.e., Apple and Country Group go up and down completely randomly.
Pair Corralation between Apple and Country Group
Given the investment horizon of 90 days Apple Inc is expected to generate 0.8 times more return on investment than Country Group. However, Apple Inc is 1.25 times less risky than Country Group. It trades about -0.04 of its potential returns per unit of risk. Country Group Holdings is currently generating about -0.18 per unit of risk. If you would invest 24,301 in Apple Inc on November 4, 2024 and sell it today you would lose (701.00) from holding Apple Inc or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Country Group Holdings
Performance |
| Timeline |
| Apple Inc |
| Country Group Holdings |
Apple and Country Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Country Group
The main advantage of trading using opposite Apple and Country Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Country Group 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 Country Group will offset losses from the drop in Country Group's long position.The idea behind Apple Inc and Country Group Holdings 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.| Country Group vs. Asia Plus Group | Country Group vs. Globlex Holding Management | Country Group vs. Asia Green Energy | Country Group vs. Amanah Leasing Public |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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