Correlation Between Apple and Eshallgo
Can any of the company-specific risk be diversified away by investing in both Apple and Eshallgo 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 Eshallgo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Eshallgo Class A, you can compare the effects of market volatilities on Apple and Eshallgo 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 Eshallgo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Eshallgo.
Diversification Opportunities for Apple and Eshallgo
Weak diversification
The 3 months correlation between Apple and Eshallgo is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Eshallgo Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eshallgo Class A 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 Eshallgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eshallgo Class A has no effect on the direction of Apple i.e., Apple and Eshallgo go up and down completely randomly.
Pair Corralation between Apple and Eshallgo
Given the investment horizon of 90 days Apple Inc is expected to generate 0.13 times more return on investment than Eshallgo. However, Apple Inc is 7.8 times less risky than Eshallgo. It trades about -0.08 of its potential returns per unit of risk. Eshallgo Class A is currently generating about -0.31 per unit of risk. If you would invest 24,385 in Apple Inc on November 3, 2024 and sell it today you would lose (785.00) from holding Apple Inc or give up 3.22% 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. Eshallgo Class A
Performance |
| Timeline |
| Apple Inc |
| Eshallgo Class A |
Apple and Eshallgo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Eshallgo
The main advantage of trading using opposite Apple and Eshallgo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Eshallgo 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 Eshallgo will offset losses from the drop in Eshallgo's long position.The idea behind Apple Inc and Eshallgo Class A 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.| Eshallgo vs. Energy and Environmental | Eshallgo vs. Allegheny Technologies Incorporated | Eshallgo vs. Algoma Steel Group | Eshallgo vs. Lizhan Environmental |
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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