Correlation Between Apple and So Carlos
Can any of the company-specific risk be diversified away by investing in both Apple and So Carlos 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 So Carlos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and So Carlos Empreendimentos, you can compare the effects of market volatilities on Apple and So Carlos 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 So Carlos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and So Carlos.
Diversification Opportunities for Apple and So Carlos
Excellent diversification
The 3 months correlation between Apple and SCAR3 is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and So Carlos Empreendimentos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on So Carlos Empreendimentos 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 So Carlos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of So Carlos Empreendimentos has no effect on the direction of Apple i.e., Apple and So Carlos go up and down completely randomly.
Pair Corralation between Apple and So Carlos
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.63 times more return on investment than So Carlos. However, Apple Inc is 1.6 times less risky than So Carlos. It trades about 0.11 of its potential returns per unit of risk. So Carlos Empreendimentos is currently generating about -0.07 per unit of risk. If you would invest 6,675 in Apple Inc on August 29, 2024 and sell it today you would earn a total of 174.00 from holding Apple Inc or generate 2.61% 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. So Carlos Empreendimentos
Performance |
| Timeline |
| Apple Inc |
| So Carlos Empreendimentos |
Apple and So Carlos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and So Carlos
The main advantage of trading using opposite Apple and So Carlos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, So Carlos 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 So Carlos will offset losses from the drop in So Carlos' long position.The idea behind Apple Inc and So Carlos Empreendimentos 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.| So Carlos vs. EZTEC Empreendimentos e | So Carlos vs. PBG SA | So Carlos vs. LPS Brasil | So Carlos vs. Tecnisa SA |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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