Correlation Between Apple and SUNCOKE ENERGY
Can any of the company-specific risk be diversified away by investing in both Apple and SUNCOKE ENERGY 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 SUNCOKE ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and SUNCOKE ENERGY, you can compare the effects of market volatilities on Apple and SUNCOKE ENERGY 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 SUNCOKE ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SUNCOKE ENERGY.
Diversification Opportunities for Apple and SUNCOKE ENERGY
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and SUNCOKE is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SUNCOKE ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNCOKE ENERGY 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 SUNCOKE ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNCOKE ENERGY has no effect on the direction of Apple i.e., Apple and SUNCOKE ENERGY go up and down completely randomly.
Pair Corralation between Apple and SUNCOKE ENERGY
Assuming the 90 days trading horizon Apple is expected to generate 1.66 times less return on investment than SUNCOKE ENERGY. But when comparing it to its historical volatility, Apple Inc is 1.76 times less risky than SUNCOKE ENERGY. It trades about 0.07 of its potential returns per unit of risk. SUNCOKE ENERGY is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 817.00 in SUNCOKE ENERGY on September 4, 2024 and sell it today you would earn a total of 383.00 from holding SUNCOKE ENERGY or generate 46.88% 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. SUNCOKE ENERGY
Performance |
| Timeline |
| Apple Inc |
| SUNCOKE ENERGY |
Apple and SUNCOKE ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and SUNCOKE ENERGY
The main advantage of trading using opposite Apple and SUNCOKE ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, SUNCOKE ENERGY 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 SUNCOKE ENERGY will offset losses from the drop in SUNCOKE ENERGY's 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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