Correlation Between Apple and Fuse Group
Can any of the company-specific risk be diversified away by investing in both Apple and Fuse 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 Fuse 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 Fuse Group Holding, you can compare the effects of market volatilities on Apple and Fuse 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 Fuse Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Fuse Group.
Diversification Opportunities for Apple and Fuse Group
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and Fuse is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Fuse Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuse Group Holding 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 Fuse Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuse Group Holding has no effect on the direction of Apple i.e., Apple and Fuse Group go up and down completely randomly.
Pair Corralation between Apple and Fuse Group
Given the investment horizon of 90 days Apple is expected to generate 27.12 times less return on investment than Fuse Group. But when comparing it to its historical volatility, Apple Inc is 18.66 times less risky than Fuse Group. It trades about 0.08 of its potential returns per unit of risk. Fuse Group Holding is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Fuse Group Holding on November 3, 2024 and sell it today you would earn a total of 21.00 from holding Fuse Group Holding or generate 53.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Apple Inc vs. Fuse Group Holding
Performance |
| Timeline |
| Apple Inc |
| Fuse Group Holding |
Apple and Fuse Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Fuse Group
The main advantage of trading using opposite Apple and Fuse Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Fuse 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 Fuse Group will offset losses from the drop in Fuse Group's long position.The idea behind Apple Inc and Fuse Group Holding 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.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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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