Correlation Between Advanced Micro and Apple
Can any of the company-specific risk be diversified away by investing in both Advanced Micro 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 Advanced Micro and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Apple Inc, you can compare the effects of market volatilities on Advanced Micro 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 Advanced Micro with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Apple.
Diversification Opportunities for Advanced Micro and Apple
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Advanced and Apple is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Advanced Micro 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 Advanced Micro Devices 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 Advanced Micro i.e., Advanced Micro and Apple go up and down completely randomly.
Pair Corralation between Advanced Micro and Apple
Assuming the 90 days horizon Advanced Micro Devices is expected to under-perform the Apple. In addition to that, Advanced Micro is 1.78 times more volatile than Apple Inc. It trades about -0.23 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 21,524 in Apple Inc on August 28, 2024 and sell it today you would earn a total of 406.00 from holding Apple Inc or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. Apple Inc
Performance |
| Timeline |
| Advanced Micro Devices |
| Apple Inc |
Advanced Micro and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Apple
The main advantage of trading using opposite Advanced Micro and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro 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.| Advanced Micro vs. NVIDIA | Advanced Micro vs. NVIDIA | Advanced Micro vs. QUALCOMM Incorporated | Advanced Micro vs. Intel |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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