Correlation Between Apple and REGAL ASIAN
Can any of the company-specific risk be diversified away by investing in both Apple and REGAL ASIAN 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 REGAL ASIAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and REGAL ASIAN INVESTMENTS, you can compare the effects of market volatilities on Apple and REGAL ASIAN 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 REGAL ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and REGAL ASIAN.
Diversification Opportunities for Apple and REGAL ASIAN
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and REGAL is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and REGAL ASIAN INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL ASIAN INVESTMENTS 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 REGAL ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL ASIAN INVESTMENTS has no effect on the direction of Apple i.e., Apple and REGAL ASIAN go up and down completely randomly.
Pair Corralation between Apple and REGAL ASIAN
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.83 times more return on investment than REGAL ASIAN. However, Apple Inc is 1.21 times less risky than REGAL ASIAN. It trades about 0.05 of its potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about -0.1 per unit of risk. If you would invest 21,629 in Apple Inc on August 24, 2024 and sell it today you would earn a total of 266.00 from holding Apple Inc or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Apple Inc vs. REGAL ASIAN INVESTMENTS
Performance |
| Timeline |
| Apple Inc |
| REGAL ASIAN INVESTMENTS |
Apple and REGAL ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and REGAL ASIAN
The main advantage of trading using opposite Apple and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, REGAL ASIAN 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 REGAL ASIAN will offset losses from the drop in REGAL ASIAN's long position.| Apple vs. INFORMATION SVC GRP | Apple vs. DATANG INTL POW | Apple vs. JIAHUA STORES | Apple vs. Qurate Retail Series |
| REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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