Correlation Between Apple and Westcore Small-cap
Can any of the company-specific risk be diversified away by investing in both Apple and Westcore Small-cap 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 Westcore Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Westcore Small Cap Growth, you can compare the effects of market volatilities on Apple and Westcore Small-cap 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 Westcore Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Westcore Small-cap.
Diversification Opportunities for Apple and Westcore Small-cap
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apple and Westcore is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Westcore Small Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westcore Small Cap 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 Westcore Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westcore Small Cap has no effect on the direction of Apple i.e., Apple and Westcore Small-cap go up and down completely randomly.
Pair Corralation between Apple and Westcore Small-cap
Given the investment horizon of 90 days Apple Inc is expected to generate 1.02 times more return on investment than Westcore Small-cap. However, Apple is 1.02 times more volatile than Westcore Small Cap Growth. It trades about 0.08 of its potential returns per unit of risk. Westcore Small Cap Growth is currently generating about 0.06 per unit of risk. If you would invest 22,177 in Apple Inc on November 3, 2024 and sell it today you would earn a total of 1,423 from holding Apple Inc or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.36% |
| Values | Daily Returns |
Apple Inc vs. Westcore Small Cap Growth
Performance |
| Timeline |
| Apple Inc |
| Westcore Small Cap |
Apple and Westcore Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Westcore Small-cap
The main advantage of trading using opposite Apple and Westcore Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Westcore Small-cap 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 Westcore Small-cap will offset losses from the drop in Westcore Small-cap's long position.The idea behind Apple Inc and Westcore Small Cap Growth 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.| Westcore Small-cap vs. Morningstar Defensive Bond | Westcore Small-cap vs. Angel Oak Financial | Westcore Small-cap vs. Siit High Yield | Westcore Small-cap vs. Ab Bond Inflation |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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