Correlation Between Apple and Thoresen Thai
Can any of the company-specific risk be diversified away by investing in both Apple and Thoresen Thai 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 Thoresen Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Thoresen Thai Agencies, you can compare the effects of market volatilities on Apple and Thoresen Thai 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 Thoresen Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Thoresen Thai.
Diversification Opportunities for Apple and Thoresen Thai
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apple and Thoresen is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Thoresen Thai Agencies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thoresen Thai Agencies 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 Thoresen Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thoresen Thai Agencies has no effect on the direction of Apple i.e., Apple and Thoresen Thai go up and down completely randomly.
Pair Corralation between Apple and Thoresen Thai
Given the investment horizon of 90 days Apple Inc is expected to generate 0.45 times more return on investment than Thoresen Thai. However, Apple Inc is 2.2 times less risky than Thoresen Thai. It trades about -0.08 of its potential returns per unit of risk. Thoresen Thai Agencies is currently generating about -0.07 per unit of risk. If you would invest 24,385 in Apple Inc on November 3, 2024 and sell it today you would lose (785.00) from holding Apple Inc or give up 3.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
Apple Inc vs. Thoresen Thai Agencies
Performance |
| Timeline |
| Apple Inc |
| Thoresen Thai Agencies |
Apple and Thoresen Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Thoresen Thai
The main advantage of trading using opposite Apple and Thoresen Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Thoresen Thai 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 Thoresen Thai will offset losses from the drop in Thoresen Thai's long position.The idea behind Apple Inc and Thoresen Thai Agencies 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.| Thoresen Thai vs. United Insurance Holdings | Thoresen Thai vs. X FAB Silicon Foundries | Thoresen Thai vs. INSURANCE AUST GRP | Thoresen Thai vs. Reinsurance Group of |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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