Correlation Between Apple and Intertech
Can any of the company-specific risk be diversified away by investing in both Apple and Intertech 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 Intertech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Intertech SA Inter, you can compare the effects of market volatilities on Apple and Intertech 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 Intertech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Intertech.
Diversification Opportunities for Apple and Intertech
Significant diversification
The 3 months correlation between Apple and Intertech is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Intertech SA Inter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intertech SA Inter 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 Intertech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intertech SA Inter has no effect on the direction of Apple i.e., Apple and Intertech go up and down completely randomly.
Pair Corralation between Apple and Intertech
Given the investment horizon of 90 days Apple Inc is expected to under-perform the Intertech. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.03 times less risky than Intertech. The stock trades about -0.08 of its potential returns per unit of risk. The Intertech SA Inter is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 114.00 in Intertech SA Inter on November 3, 2024 and sell it today you would earn a total of 1.00 from holding Intertech SA Inter or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Apple Inc vs. Intertech SA Inter
Performance |
| Timeline |
| Apple Inc |
| Intertech SA Inter |
Apple and Intertech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Intertech
The main advantage of trading using opposite Apple and Intertech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Intertech 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 Intertech will offset losses from the drop in Intertech's long position.The idea behind Apple Inc and Intertech SA Inter 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.| Intertech vs. Unibios Holdings SA | Intertech vs. Intracom Holdings SA | Intertech vs. Ideal Group SA | Intertech vs. Public Power |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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