Correlation Between AlzChem Group and Apple
Can any of the company-specific risk be diversified away by investing in both AlzChem Group 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 AlzChem Group and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AlzChem Group AG and Apple Inc, you can compare the effects of market volatilities on AlzChem Group 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 AlzChem Group with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of AlzChem Group and Apple.
Diversification Opportunities for AlzChem Group and Apple
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AlzChem and Apple is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding AlzChem Group AG and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and AlzChem Group 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 AlzChem Group AG 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 AlzChem Group i.e., AlzChem Group and Apple go up and down completely randomly.
Pair Corralation between AlzChem Group and Apple
Assuming the 90 days trading horizon AlzChem Group AG is expected to under-perform the Apple. In addition to that, AlzChem Group is 5.09 times more volatile than Apple Inc. It trades about -0.01 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.59 per unit of volatility. If you would invest 22,085 in Apple Inc on September 24, 2024 and sell it today you would earn a total of 2,030 from holding Apple Inc or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AlzChem Group AG vs. Apple Inc
Performance |
| Timeline |
| AlzChem Group AG |
| Apple Inc |
AlzChem Group and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AlzChem Group and Apple
The main advantage of trading using opposite AlzChem Group and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AlzChem Group 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.| AlzChem Group vs. Apple Inc | AlzChem Group vs. Apple Inc | AlzChem Group vs. Apple Inc | AlzChem Group vs. Apple Inc |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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