Correlation Between Apple and KWG Group
Can any of the company-specific risk be diversified away by investing in both Apple and KWG 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 KWG 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 KWG Group Holdings, you can compare the effects of market volatilities on Apple and KWG 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 KWG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and KWG Group.
Diversification Opportunities for Apple and KWG Group
Pay attention - limited upside
The 3 months correlation between Apple and KWG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and KWG Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KWG Group Holdings 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 KWG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KWG Group Holdings has no effect on the direction of Apple i.e., Apple and KWG Group go up and down completely randomly.
Pair Corralation between Apple and KWG Group
If you would invest 22,423 in Apple Inc on September 12, 2024 and sell it today you would earn a total of 2,503 from holding Apple Inc or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. KWG Group Holdings
Performance |
| Timeline |
| Apple Inc |
| KWG Group Holdings |
Apple and KWG Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and KWG Group
The main advantage of trading using opposite Apple and KWG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, KWG 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 KWG Group will offset losses from the drop in KWG Group's long position.The idea behind Apple Inc and KWG Group Holdings 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.| KWG Group vs. Datadog | KWG Group vs. CDW Corp | KWG Group vs. Lindblad Expeditions Holdings | KWG Group vs. Verra Mobility Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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