Correlation Between Apple and Spectra Systems
Can any of the company-specific risk be diversified away by investing in both Apple and Spectra Systems 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 Spectra Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Spectra Systems, you can compare the effects of market volatilities on Apple and Spectra Systems 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 Spectra Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Spectra Systems.
Diversification Opportunities for Apple and Spectra Systems
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Apple and Spectra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Spectra Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectra Systems 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 Spectra Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectra Systems has no effect on the direction of Apple i.e., Apple and Spectra Systems go up and down completely randomly.
Pair Corralation between Apple and Spectra Systems
Given the investment horizon of 90 days Apple Inc is expected to generate 2.01 times more return on investment than Spectra Systems. However, Apple is 2.01 times more volatile than Spectra Systems. It trades about 0.12 of its potential returns per unit of risk. Spectra Systems is currently generating about 0.13 per unit of risk. If you would invest 19,359 in Apple Inc on September 1, 2024 and sell it today you would earn a total of 4,374 from holding Apple Inc or generate 22.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Spectra Systems
Performance |
| Timeline |
| Apple Inc |
| Spectra Systems |
Apple and Spectra Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Spectra Systems
The main advantage of trading using opposite Apple and Spectra Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Spectra Systems 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 Spectra Systems will offset losses from the drop in Spectra Systems' long position.The idea behind Apple Inc and Spectra Systems 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.| Spectra Systems vs. Legacy Education | Spectra Systems vs. Apple Inc | Spectra Systems vs. NVIDIA | Spectra Systems vs. Microsoft |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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