Correlation Between Apple and Elisa Oyj
Can any of the company-specific risk be diversified away by investing in both Apple and Elisa Oyj 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 Elisa Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Elisa Oyj, you can compare the effects of market volatilities on Apple and Elisa Oyj 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 Elisa Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Elisa Oyj.
Diversification Opportunities for Apple and Elisa Oyj
Excellent diversification
The 3 months correlation between Apple and Elisa is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Elisa Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elisa Oyj 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 Elisa Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elisa Oyj has no effect on the direction of Apple i.e., Apple and Elisa Oyj go up and down completely randomly.
Pair Corralation between Apple and Elisa Oyj
Given the investment horizon of 90 days Apple Inc is expected to under-perform the Elisa Oyj. In addition to that, Apple is 1.2 times more volatile than Elisa Oyj. It trades about -0.08 of its total potential returns per unit of risk. Elisa Oyj is currently generating about -0.05 per unit of volatility. If you would invest 4,236 in Elisa Oyj on November 3, 2024 and sell it today you would lose (82.00) from holding Elisa Oyj or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Apple Inc vs. Elisa Oyj
Performance |
| Timeline |
| Apple Inc |
| Elisa Oyj |
Apple and Elisa Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Elisa Oyj
The main advantage of trading using opposite Apple and Elisa Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Elisa Oyj 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 Elisa Oyj will offset losses from the drop in Elisa Oyj's long position.The idea behind Apple Inc and Elisa Oyj 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.| Elisa Oyj vs. Kesko Oyj | Elisa Oyj vs. Sampo Oyj A | Elisa Oyj vs. UPM Kymmene Oyj | Elisa Oyj vs. Orion Oyj B |
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 Stocks Directory module to find actively traded stocks across global markets.
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