Correlation Between Apple and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Apple and AstraZeneca PLC 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 AstraZeneca PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and AstraZeneca PLC, you can compare the effects of market volatilities on Apple and AstraZeneca PLC 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 AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and AstraZeneca PLC.
Diversification Opportunities for Apple and AstraZeneca PLC
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and AstraZeneca is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC 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 AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of Apple i.e., Apple and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Apple and AstraZeneca PLC
Assuming the 90 days trading horizon Apple Inc is expected to generate 1.07 times more return on investment than AstraZeneca PLC. However, Apple is 1.07 times more volatile than AstraZeneca PLC. It trades about 0.07 of its potential returns per unit of risk. AstraZeneca PLC is currently generating about 0.01 per unit of risk. If you would invest 13,537 in Apple Inc on August 30, 2024 and sell it today you would earn a total of 8,753 from holding Apple Inc or generate 64.66% 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. AstraZeneca PLC
Performance |
| Timeline |
| Apple Inc |
| AstraZeneca PLC |
Apple and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and AstraZeneca PLC
The main advantage of trading using opposite Apple and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| Apple vs. Ryanair Holdings plc | Apple vs. SBA Communications Corp | Apple vs. Consolidated Communications Holdings | Apple vs. Singapore Telecommunications Limited |
| AstraZeneca PLC vs. Johnson Johnson | AstraZeneca PLC vs. Pfizer Inc | AstraZeneca PLC vs. Amgen Inc | AstraZeneca PLC vs. General Mills |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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