Correlation Between Apple and THRACE PLASTICS
Can any of the company-specific risk be diversified away by investing in both Apple and THRACE PLASTICS 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 THRACE PLASTICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and THRACE PLASTICS, you can compare the effects of market volatilities on Apple and THRACE PLASTICS 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 THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and THRACE PLASTICS.
Diversification Opportunities for Apple and THRACE PLASTICS
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apple and THRACE is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS 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 THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of Apple i.e., Apple and THRACE PLASTICS go up and down completely randomly.
Pair Corralation between Apple and THRACE PLASTICS
Assuming the 90 days trading horizon Apple is expected to generate 2.69 times less return on investment than THRACE PLASTICS. In addition to that, Apple is 1.56 times more volatile than THRACE PLASTICS. It trades about 0.03 of its total potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.12 per unit of volatility. If you would invest 393.00 in THRACE PLASTICS on November 7, 2024 and sell it today you would earn a total of 14.00 from holding THRACE PLASTICS or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. THRACE PLASTICS
Performance |
| Timeline |
| Apple Inc |
| THRACE PLASTICS |
Apple and THRACE PLASTICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and THRACE PLASTICS
The main advantage of trading using opposite Apple and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, THRACE PLASTICS 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 THRACE PLASTICS will offset losses from the drop in THRACE PLASTICS's long position.| Apple vs. SOEDER SPORTFISKE AB | Apple vs. Alliance Data Systems | Apple vs. Air Transport Services | Apple vs. Extra Space Storage |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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