Correlation Between Apple and GALP ENERGIA
Can any of the company-specific risk be diversified away by investing in both Apple and GALP ENERGIA 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 GALP ENERGIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and GALP ENERGIA B , you can compare the effects of market volatilities on Apple and GALP ENERGIA 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 GALP ENERGIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and GALP ENERGIA.
Diversification Opportunities for Apple and GALP ENERGIA
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Apple and GALP is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and GALP ENERGIA B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GALP ENERGIA B 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 GALP ENERGIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GALP ENERGIA B has no effect on the direction of Apple i.e., Apple and GALP ENERGIA go up and down completely randomly.
Pair Corralation between Apple and GALP ENERGIA
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the GALP ENERGIA. In addition to that, Apple is 1.65 times more volatile than GALP ENERGIA B . It trades about -0.08 of its total potential returns per unit of risk. GALP ENERGIA B is currently generating about 0.09 per unit of volatility. If you would invest 1,541 in GALP ENERGIA B on November 3, 2024 and sell it today you would earn a total of 33.00 from holding GALP ENERGIA B or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. GALP ENERGIA B
Performance |
| Timeline |
| Apple Inc |
| GALP ENERGIA B |
Apple and GALP ENERGIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and GALP ENERGIA
The main advantage of trading using opposite Apple and GALP ENERGIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, GALP ENERGIA 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 GALP ENERGIA will offset losses from the drop in GALP ENERGIA's long position.| Apple vs. USWE SPORTS AB | Apple vs. KIMBALL ELECTRONICS | Apple vs. LG Display Co | Apple vs. COLUMBIA SPORTSWEAR |
| GALP ENERGIA vs. Apple Inc | GALP ENERGIA vs. Apple Inc | GALP ENERGIA vs. Apple Inc | GALP ENERGIA vs. Apple Inc |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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