Correlation Between Apple and Nacon Sa
Can any of the company-specific risk be diversified away by investing in both Apple and Nacon Sa 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 Nacon Sa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Nacon Sa, you can compare the effects of market volatilities on Apple and Nacon Sa 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 Nacon Sa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Nacon Sa.
Diversification Opportunities for Apple and Nacon Sa
Weak diversification
The 3 months correlation between Apple and Nacon is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Nacon Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nacon Sa 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 Nacon Sa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nacon Sa has no effect on the direction of Apple i.e., Apple and Nacon Sa go up and down completely randomly.
Pair Corralation between Apple and Nacon Sa
Given the investment horizon of 90 days Apple Inc is expected to under-perform the Nacon Sa. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 4.83 times less risky than Nacon Sa. The stock trades about -0.39 of its potential returns per unit of risk. The Nacon Sa is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 53.00 in Nacon Sa on October 24, 2024 and sell it today you would earn a total of 10.00 from holding Nacon Sa or generate 18.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Apple Inc vs. Nacon Sa
Performance |
| Timeline |
| Apple Inc |
| Nacon Sa |
Apple and Nacon Sa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Nacon Sa
The main advantage of trading using opposite Apple and Nacon Sa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Nacon Sa 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 Nacon Sa will offset losses from the drop in Nacon Sa's long position.The idea behind Apple Inc and Nacon Sa 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.| Nacon Sa vs. BigBen Interactive | Nacon Sa vs. Neoen SA | Nacon Sa vs. Solutions 30 SE | Nacon Sa vs. Voltalia SA |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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