Correlation Between Apple and MIRAMAR HOTEL
Can any of the company-specific risk be diversified away by investing in both Apple and MIRAMAR HOTEL 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 MIRAMAR HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and MIRAMAR HOTEL INV, you can compare the effects of market volatilities on Apple and MIRAMAR HOTEL 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 MIRAMAR HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and MIRAMAR HOTEL.
Diversification Opportunities for Apple and MIRAMAR HOTEL
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and MIRAMAR is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and MIRAMAR HOTEL INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAMAR HOTEL INV 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 MIRAMAR HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAMAR HOTEL INV has no effect on the direction of Apple i.e., Apple and MIRAMAR HOTEL go up and down completely randomly.
Pair Corralation between Apple and MIRAMAR HOTEL
Assuming the 90 days trading horizon Apple is expected to generate 2.4 times less return on investment than MIRAMAR HOTEL. But when comparing it to its historical volatility, Apple Inc is 1.87 times less risky than MIRAMAR HOTEL. It trades about 0.05 of its potential returns per unit of risk. MIRAMAR HOTEL INV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 66.00 in MIRAMAR HOTEL INV on August 28, 2024 and sell it today you would earn a total of 46.00 from holding MIRAMAR HOTEL INV or generate 69.7% 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. MIRAMAR HOTEL INV
Performance |
| Timeline |
| Apple Inc |
| MIRAMAR HOTEL INV |
Apple and MIRAMAR HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and MIRAMAR HOTEL
The main advantage of trading using opposite Apple and MIRAMAR HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, MIRAMAR HOTEL 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 MIRAMAR HOTEL will offset losses from the drop in MIRAMAR HOTEL's long position.The idea behind Apple Inc and MIRAMAR HOTEL INV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MIRAMAR HOTEL vs. Apple Inc | MIRAMAR HOTEL vs. Apple Inc | MIRAMAR HOTEL vs. Microsoft | MIRAMAR HOTEL vs. Microsoft |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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