Correlation Between Apple and IShares BMFBovespa
Can any of the company-specific risk be diversified away by investing in both Apple and IShares BMFBovespa 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 IShares BMFBovespa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and iShares BMFBovespa Small, you can compare the effects of market volatilities on Apple and IShares BMFBovespa 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 IShares BMFBovespa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and IShares BMFBovespa.
Diversification Opportunities for Apple and IShares BMFBovespa
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Apple and IShares is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and iShares BMFBovespa Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares BMFBovespa Small 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 IShares BMFBovespa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares BMFBovespa Small has no effect on the direction of Apple i.e., Apple and IShares BMFBovespa go up and down completely randomly.
Pair Corralation between Apple and IShares BMFBovespa
Given the investment horizon of 90 days Apple Inc is expected to generate 0.99 times more return on investment than IShares BMFBovespa. However, Apple Inc is 1.01 times less risky than IShares BMFBovespa. It trades about 0.04 of its potential returns per unit of risk. iShares BMFBovespa Small is currently generating about -0.04 per unit of risk. If you would invest 19,101 in Apple Inc on October 24, 2024 and sell it today you would earn a total of 3,152 from holding Apple Inc or generate 16.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. iShares BMFBovespa Small
Performance |
| Timeline |
| Apple Inc |
| iShares BMFBovespa Small |
Apple and IShares BMFBovespa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and IShares BMFBovespa
The main advantage of trading using opposite Apple and IShares BMFBovespa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, IShares BMFBovespa 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 IShares BMFBovespa will offset losses from the drop in IShares BMFBovespa's long position.The idea behind Apple Inc and iShares BMFBovespa Small 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.| IShares BMFBovespa vs. iShares Trust | IShares BMFBovespa vs. iShares Trust | IShares BMFBovespa vs. iShares Trust | IShares BMFBovespa vs. iShares iShares |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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