Correlation Between Alfen NV and Apple
Can any of the company-specific risk be diversified away by investing in both Alfen NV and Apple 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 Alfen NV and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfen NV and Apple Inc, you can compare the effects of market volatilities on Alfen NV and Apple 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 Alfen NV with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfen NV and Apple.
Diversification Opportunities for Alfen NV and Apple
Very good diversification
The 3 months correlation between Alfen and Apple is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Alfen NV and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Alfen NV 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 Alfen NV are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Alfen NV i.e., Alfen NV and Apple go up and down completely randomly.
Pair Corralation between Alfen NV and Apple
Assuming the 90 days horizon Alfen NV is expected to under-perform the Apple. In addition to that, Alfen NV is 2.28 times more volatile than Apple Inc. It trades about -0.09 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.07 per unit of volatility. If you would invest 19,224 in Apple Inc on September 4, 2024 and sell it today you would earn a total of 5,041 from holding Apple Inc or generate 26.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Alfen NV vs. Apple Inc
Performance |
| Timeline |
| Alfen NV |
| Apple Inc |
Alfen NV and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfen NV and Apple
The main advantage of trading using opposite Alfen NV and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfen NV position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Alfen NV vs. Apple Inc | Alfen NV vs. Microsoft | Alfen NV vs. Amazon Inc | Alfen NV vs. Alphabet Inc Class C |
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 Stocks Directory module to find actively traded stocks across global markets.
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