Correlation Between Apple and Anfield Energy
Can any of the company-specific risk be diversified away by investing in both Apple and Anfield Energy 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 Anfield Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Anfield Energy, you can compare the effects of market volatilities on Apple and Anfield Energy 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 Anfield Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Anfield Energy.
Diversification Opportunities for Apple and Anfield Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Apple and Anfield is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Anfield Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Energy 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 Anfield Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anfield Energy has no effect on the direction of Apple i.e., Apple and Anfield Energy go up and down completely randomly.
Pair Corralation between Apple and Anfield Energy
Assuming the 90 days trading horizon Apple is expected to generate 4.54 times less return on investment than Anfield Energy. But when comparing it to its historical volatility, Apple Inc is 7.01 times less risky than Anfield Energy. It trades about 0.08 of its potential returns per unit of risk. Anfield Energy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4.09 in Anfield Energy on September 4, 2024 and sell it today you would earn a total of 1.01 from holding Anfield Energy or generate 24.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Apple Inc vs. Anfield Energy
Performance |
| Timeline |
| Apple Inc |
| Anfield Energy |
Apple and Anfield Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Anfield Energy
The main advantage of trading using opposite Apple and Anfield Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Anfield Energy 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 Anfield Energy will offset losses from the drop in Anfield Energy's long position.| Apple vs. CDL INVESTMENT | Apple vs. ULTRA CLEAN HLDGS | Apple vs. Eidesvik Offshore ASA | Apple vs. SBM OFFSHORE |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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