Correlation Between Apple and FARM 51
Can any of the company-specific risk be diversified away by investing in both Apple and FARM 51 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 FARM 51 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and FARM 51 GROUP, you can compare the effects of market volatilities on Apple and FARM 51 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 FARM 51. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and FARM 51.
Diversification Opportunities for Apple and FARM 51
Very good diversification
The 3 months correlation between Apple and FARM is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and FARM 51 GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARM 51 GROUP 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 FARM 51. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARM 51 GROUP has no effect on the direction of Apple i.e., Apple and FARM 51 go up and down completely randomly.
Pair Corralation between Apple and FARM 51
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the FARM 51. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 2.22 times less risky than FARM 51. The stock trades about -0.31 of its potential returns per unit of risk. The FARM 51 GROUP is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 301.00 in FARM 51 GROUP on October 17, 2024 and sell it today you would earn a total of 0.00 from holding FARM 51 GROUP or generate 0.0% 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. FARM 51 GROUP
Performance |
| Timeline |
| Apple Inc |
| FARM 51 GROUP |
Apple and FARM 51 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and FARM 51
The main advantage of trading using opposite Apple and FARM 51 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, FARM 51 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 FARM 51 will offset losses from the drop in FARM 51's long position.| Apple vs. JAPAN AIRLINES | Apple vs. MAVEN WIRELESS SWEDEN | Apple vs. Nok Airlines PCL | Apple vs. Coffee Holding Co |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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