Correlation Between Apple and FTC SOLAR
Can any of the company-specific risk be diversified away by investing in both Apple and FTC SOLAR 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 FTC SOLAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and FTC SOLAR INC, you can compare the effects of market volatilities on Apple and FTC SOLAR 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 FTC SOLAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and FTC SOLAR.
Diversification Opportunities for Apple and FTC SOLAR
Pay attention - limited upside
The 3 months correlation between Apple and FTC is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and FTC SOLAR INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTC SOLAR INC 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 FTC SOLAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTC SOLAR INC has no effect on the direction of Apple i.e., Apple and FTC SOLAR go up and down completely randomly.
Pair Corralation between Apple and FTC SOLAR
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the FTC SOLAR. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 20.7 times less risky than FTC SOLAR. The stock trades about -0.28 of its potential returns per unit of risk. The FTC SOLAR INC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 270.00 in FTC SOLAR INC on October 16, 2024 and sell it today you would earn a total of 0.00 from holding FTC SOLAR INC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. FTC SOLAR INC
Performance |
| Timeline |
| Apple Inc |
| FTC SOLAR INC |
Apple and FTC SOLAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and FTC SOLAR
The main advantage of trading using opposite Apple and FTC SOLAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, FTC SOLAR 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 FTC SOLAR will offset losses from the drop in FTC SOLAR's long position.| Apple vs. Magnachip Semiconductor | Apple vs. Semiconductor Manufacturing International | Apple vs. MagnaChip Semiconductor Corp | Apple vs. Taiwan Semiconductor Manufacturing |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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