Correlation Between Apple and BANK RAKYAT
Can any of the company-specific risk be diversified away by investing in both Apple and BANK RAKYAT 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 BANK RAKYAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and BANK RAKYAT IND, you can compare the effects of market volatilities on Apple and BANK RAKYAT 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 BANK RAKYAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and BANK RAKYAT.
Diversification Opportunities for Apple and BANK RAKYAT
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and BANK is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and BANK RAKYAT IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK RAKYAT IND 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 BANK RAKYAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK RAKYAT IND has no effect on the direction of Apple i.e., Apple and BANK RAKYAT go up and down completely randomly.
Pair Corralation between Apple and BANK RAKYAT
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.57 times more return on investment than BANK RAKYAT. However, Apple Inc is 1.75 times less risky than BANK RAKYAT. It trades about 0.05 of its potential returns per unit of risk. BANK RAKYAT IND is currently generating about -0.16 per unit of risk. If you would invest 21,579 in Apple Inc on August 27, 2024 and sell it today you would earn a total of 271.00 from holding Apple Inc or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. BANK RAKYAT IND
Performance |
| Timeline |
| Apple Inc |
| BANK RAKYAT IND |
Apple and BANK RAKYAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and BANK RAKYAT
The main advantage of trading using opposite Apple and BANK RAKYAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, BANK RAKYAT 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 BANK RAKYAT will offset losses from the drop in BANK RAKYAT's long position.| Apple vs. Penn National Gaming | Apple vs. Fast Retailing Co | Apple vs. Hochschild Mining plc | Apple vs. AUTO TRADER ADR |
| BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Microsoft |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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