Correlation Between Apple and Ocean Harvest
Can any of the company-specific risk be diversified away by investing in both Apple and Ocean Harvest 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 Ocean Harvest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Ocean Harvest Technology, you can compare the effects of market volatilities on Apple and Ocean Harvest 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 Ocean Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Ocean Harvest.
Diversification Opportunities for Apple and Ocean Harvest
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apple and Ocean is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Ocean Harvest Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Harvest Technology 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 Ocean Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Harvest Technology has no effect on the direction of Apple i.e., Apple and Ocean Harvest go up and down completely randomly.
Pair Corralation between Apple and Ocean Harvest
Given the investment horizon of 90 days Apple Inc is expected to generate 0.75 times more return on investment than Ocean Harvest. However, Apple Inc is 1.34 times less risky than Ocean Harvest. It trades about -0.04 of its potential returns per unit of risk. Ocean Harvest Technology is currently generating about -0.22 per unit of risk. If you would invest 24,265 in Apple Inc on November 3, 2024 and sell it today you would lose (665.00) from holding Apple Inc or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Ocean Harvest Technology
Performance |
| Timeline |
| Apple Inc |
| Ocean Harvest Technology |
Apple and Ocean Harvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Ocean Harvest
The main advantage of trading using opposite Apple and Ocean Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Ocean Harvest 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 Ocean Harvest will offset losses from the drop in Ocean Harvest's long position.The idea behind Apple Inc and Ocean Harvest Technology 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.| Ocean Harvest vs. Bytes Technology | Ocean Harvest vs. Sartorius Stedim Biotech | Ocean Harvest vs. Beowulf Mining | Ocean Harvest vs. Coeur Mining |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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