Correlation Between Apple and Copper 360
Can any of the company-specific risk be diversified away by investing in both Apple and Copper 360 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 Copper 360 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Copper 360, you can compare the effects of market volatilities on Apple and Copper 360 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 Copper 360. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Copper 360.
Diversification Opportunities for Apple and Copper 360
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and Copper is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Copper 360 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper 360 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 Copper 360. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper 360 has no effect on the direction of Apple i.e., Apple and Copper 360 go up and down completely randomly.
Pair Corralation between Apple and Copper 360
Given the investment horizon of 90 days Apple Inc is expected to under-perform the Copper 360. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.43 times less risky than Copper 360. The stock trades about -0.08 of its potential returns per unit of risk. The Copper 360 is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 22,500 in Copper 360 on November 3, 2024 and sell it today you would lose (700.00) from holding Copper 360 or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Apple Inc vs. Copper 360
Performance |
| Timeline |
| Apple Inc |
| Copper 360 |
Apple and Copper 360 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Copper 360
The main advantage of trading using opposite Apple and Copper 360 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Copper 360 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 Copper 360 will offset losses from the drop in Copper 360's long position.The idea behind Apple Inc and Copper 360 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.| Copper 360 vs. Prosus NV | Copper 360 vs. Compagnie Financire Richemont | Copper 360 vs. British American Tobacco | Copper 360 vs. Glencore PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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