Correlation Between Apple and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both Apple and Commercial Vehicle 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 Commercial Vehicle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Commercial Vehicle Group, you can compare the effects of market volatilities on Apple and Commercial Vehicle 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 Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Commercial Vehicle.
Diversification Opportunities for Apple and Commercial Vehicle
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and Commercial is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle 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 Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of Apple i.e., Apple and Commercial Vehicle go up and down completely randomly.
Pair Corralation between Apple and Commercial Vehicle
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.34 times more return on investment than Commercial Vehicle. However, Apple Inc is 2.98 times less risky than Commercial Vehicle. It trades about 0.13 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.26 per unit of risk. If you would invest 21,579 in Apple Inc on August 29, 2024 and sell it today you would earn a total of 761.00 from holding Apple Inc or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Commercial Vehicle Group
Performance |
| Timeline |
| Apple Inc |
| Commercial Vehicle |
Apple and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Commercial Vehicle
The main advantage of trading using opposite Apple and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| Apple vs. Elmos Semiconductor SE | Apple vs. JAPAN TOBACCO UNSPADR12 | Apple vs. Samsung Electronics Co | Apple vs. BE Semiconductor Industries |
| Commercial Vehicle vs. XLMedia PLC | Commercial Vehicle vs. Flutter Entertainment PLC | Commercial Vehicle vs. ANTA SPORTS PRODUCT | Commercial Vehicle vs. PT Global Mediacom |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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