Correlation Between Accord Financial and Apple
Can any of the company-specific risk be diversified away by investing in both Accord Financial 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 Accord Financial and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accord Financial Corp and Apple Inc CDR, you can compare the effects of market volatilities on Accord Financial 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 Accord Financial with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accord Financial and Apple.
Diversification Opportunities for Accord Financial and Apple
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Accord and Apple is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Accord Financial Corp and Apple Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc CDR and Accord Financial 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 Accord Financial Corp 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 CDR has no effect on the direction of Accord Financial i.e., Accord Financial and Apple go up and down completely randomly.
Pair Corralation between Accord Financial and Apple
Assuming the 90 days trading horizon Accord Financial Corp is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, Accord Financial Corp is 1.22 times less risky than Apple. The stock trades about -0.07 of its potential returns per unit of risk. The Apple Inc CDR is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,311 in Apple Inc CDR on September 1, 2024 and sell it today you would earn a total of 164.00 from holding Apple Inc CDR or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accord Financial Corp vs. Apple Inc CDR
Performance |
| Timeline |
| Accord Financial Corp |
| Apple Inc CDR |
Accord Financial and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accord Financial and Apple
The main advantage of trading using opposite Accord Financial and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accord Financial 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.| Accord Financial vs. Algoma Central | Accord Financial vs. Chesswood Group Limited | Accord Financial vs. Clairvest Group | Accord Financial vs. Clarke Inc |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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