Correlation Between Apple and INDUSTRIE
Can any of the company-specific risk be diversified away by investing in both Apple and INDUSTRIE 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 INDUSTRIE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and INDUSTRIE DE NORA, you can compare the effects of market volatilities on Apple and INDUSTRIE 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 INDUSTRIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and INDUSTRIE.
Diversification Opportunities for Apple and INDUSTRIE
Pay attention - limited upside
The 3 months correlation between Apple and INDUSTRIE is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and INDUSTRIE DE NORA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDUSTRIE DE NORA 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 INDUSTRIE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDUSTRIE DE NORA has no effect on the direction of Apple i.e., Apple and INDUSTRIE go up and down completely randomly.
Pair Corralation between Apple and INDUSTRIE
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.77 times more return on investment than INDUSTRIE. However, Apple Inc is 1.29 times less risky than INDUSTRIE. It trades about 0.12 of its potential returns per unit of risk. INDUSTRIE DE NORA is currently generating about -0.15 per unit of risk. If you would invest 18,019 in Apple Inc on September 3, 2024 and sell it today you would earn a total of 4,891 from holding Apple Inc or generate 27.14% 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. INDUSTRIE DE NORA
Performance |
| Timeline |
| Apple Inc |
| INDUSTRIE DE NORA |
Apple and INDUSTRIE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and INDUSTRIE
The main advantage of trading using opposite Apple and INDUSTRIE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, INDUSTRIE 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 INDUSTRIE will offset losses from the drop in INDUSTRIE's long position.| Apple vs. Citic Telecom International | Apple vs. Grupo Carso SAB | Apple vs. GEELY AUTOMOBILE | Apple vs. Entravision Communications |
| INDUSTRIE vs. Hanison Construction Holdings | INDUSTRIE vs. HEALTHCARE REAL A | INDUSTRIE vs. Natural Health Trends | INDUSTRIE vs. Hitachi Construction Machinery |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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