Correlation Between Apple and K Bro
Can any of the company-specific risk be diversified away by investing in both Apple and K Bro 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 K Bro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and K Bro Linen, you can compare the effects of market volatilities on Apple and K Bro 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 K Bro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and K Bro.
Diversification Opportunities for Apple and K Bro
Very weak diversification
The 3 months correlation between Apple and KBRLF is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and K Bro Linen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Bro Linen 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 K Bro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Bro Linen has no effect on the direction of Apple i.e., Apple and K Bro go up and down completely randomly.
Pair Corralation between Apple and K Bro
If you would invest 20,880 in Apple Inc on November 3, 2024 and sell it today you would earn a total of 2,720 from holding Apple Inc or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
Apple Inc vs. K Bro Linen
Performance |
| Timeline |
| Apple Inc |
| K Bro Linen |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Apple and K Bro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and K Bro
The main advantage of trading using opposite Apple and K Bro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, K Bro 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 K Bro will offset losses from the drop in K Bro's long position.The idea behind Apple Inc and K Bro Linen 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.| K Bro vs. Brambles Ltd ADR | K Bro vs. Rentokil Initial PLC | K Bro vs. Team Inc | K Bro vs. SMX Public Limited |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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