Correlation Between Apple and AGRICUL BK
Can any of the company-specific risk be diversified away by investing in both Apple and AGRICUL BK 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 AGRICUL BK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and AGRICUL BK CHINA H , you can compare the effects of market volatilities on Apple and AGRICUL BK 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 AGRICUL BK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and AGRICUL BK.
Diversification Opportunities for Apple and AGRICUL BK
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and AGRICUL is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and AGRICUL BK CHINA H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGRICUL BK CHINA 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 AGRICUL BK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGRICUL BK CHINA has no effect on the direction of Apple i.e., Apple and AGRICUL BK go up and down completely randomly.
Pair Corralation between Apple and AGRICUL BK
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.67 times more return on investment than AGRICUL BK. However, Apple Inc is 1.5 times less risky than AGRICUL BK. It trades about 0.09 of its potential returns per unit of risk. AGRICUL BK CHINA H is currently generating about 0.06 per unit of risk. If you would invest 21,609 in Apple Inc on August 30, 2024 and sell it today you would earn a total of 586.00 from holding Apple Inc or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. AGRICUL BK CHINA H
Performance |
| Timeline |
| Apple Inc |
| AGRICUL BK CHINA |
Apple and AGRICUL BK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and AGRICUL BK
The main advantage of trading using opposite Apple and AGRICUL BK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, AGRICUL BK 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 AGRICUL BK will offset losses from the drop in AGRICUL BK's long position.| Apple vs. MAVEN WIRELESS SWEDEN | Apple vs. MOVIE GAMES SA | Apple vs. OFFICE DEPOT | Apple vs. AGRICULTBK HADR25 YC |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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