Correlation Between Apple and Look Holdings
Can any of the company-specific risk be diversified away by investing in both Apple and Look Holdings 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 Look Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Look Holdings, you can compare the effects of market volatilities on Apple and Look Holdings 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 Look Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Look Holdings.
Diversification Opportunities for Apple and Look Holdings
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and Look is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Look Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Look Holdings 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 Look Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Look Holdings has no effect on the direction of Apple i.e., Apple and Look Holdings go up and down completely randomly.
Pair Corralation between Apple and Look Holdings
Assuming the 90 days trading horizon Apple Inc is expected to generate 2.73 times more return on investment than Look Holdings. However, Apple is 2.73 times more volatile than Look Holdings. It trades about 0.47 of its potential returns per unit of risk. Look Holdings is currently generating about 0.43 per unit of risk. If you would invest 20,371 in Apple Inc on September 4, 2024 and sell it today you would earn a total of 2,444 from holding Apple Inc or generate 12.0% 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. Look Holdings
Performance |
| Timeline |
| Apple Inc |
| Look Holdings |
Apple and Look Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Look Holdings
The main advantage of trading using opposite Apple and Look Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Look Holdings 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 Look Holdings will offset losses from the drop in Look Holdings' 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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