Correlation Between Apple and Liechtensteinische
Can any of the company-specific risk be diversified away by investing in both Apple and Liechtensteinische 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 Liechtensteinische into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Liechtensteinische Landesbank AG, you can compare the effects of market volatilities on Apple and Liechtensteinische 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 Liechtensteinische. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Liechtensteinische.
Diversification Opportunities for Apple and Liechtensteinische
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and Liechtensteinische is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Liechtensteinische Landesbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liechtensteinische 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 Liechtensteinische. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liechtensteinische has no effect on the direction of Apple i.e., Apple and Liechtensteinische go up and down completely randomly.
Pair Corralation between Apple and Liechtensteinische
Given the investment horizon of 90 days Apple Inc is expected to generate 1.56 times more return on investment than Liechtensteinische. However, Apple is 1.56 times more volatile than Liechtensteinische Landesbank AG. It trades about 0.07 of its potential returns per unit of risk. Liechtensteinische Landesbank AG is currently generating about 0.04 per unit of risk. If you would invest 18,849 in Apple Inc on November 3, 2024 and sell it today you would earn a total of 4,751 from holding Apple Inc or generate 25.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Apple Inc vs. Liechtensteinische Landesbank
Performance |
| Timeline |
| Apple Inc |
| Liechtensteinische |
Apple and Liechtensteinische Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Liechtensteinische
The main advantage of trading using opposite Apple and Liechtensteinische positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Liechtensteinische 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 Liechtensteinische will offset losses from the drop in Liechtensteinische's long position.The idea behind Apple Inc and Liechtensteinische Landesbank AG 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.| Liechtensteinische vs. VP Bank AG | Liechtensteinische vs. Valiant Holding AG | Liechtensteinische vs. Glarner Kantonalbank | Liechtensteinische vs. Berner Kantonalbank AG |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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