Correlation Between Apple and SAF Holland
Can any of the company-specific risk be diversified away by investing in both Apple and SAF Holland 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 SAF Holland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and SAF Holland SA, you can compare the effects of market volatilities on Apple and SAF Holland 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 SAF Holland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SAF Holland.
Diversification Opportunities for Apple and SAF Holland
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Apple and SAF is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SAF Holland SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAF Holland SA 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 SAF Holland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAF Holland SA has no effect on the direction of Apple i.e., Apple and SAF Holland go up and down completely randomly.
Pair Corralation between Apple and SAF Holland
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.73 times more return on investment than SAF Holland. However, Apple Inc is 1.37 times less risky than SAF Holland. It trades about 0.12 of its potential returns per unit of risk. SAF Holland SA is currently generating about -0.07 per unit of risk. If you would invest 18,123 in Apple Inc on September 5, 2024 and sell it today you would earn a total of 4,877 from holding Apple Inc or generate 26.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. SAF Holland SA
Performance |
| Timeline |
| Apple Inc |
| SAF Holland SA |
Apple and SAF Holland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and SAF Holland
The main advantage of trading using opposite Apple and SAF Holland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, SAF Holland 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 SAF Holland will offset losses from the drop in SAF Holland's long position.| Apple vs. ACCSYS TECHPLC EO | Apple vs. AAC TECHNOLOGHLDGADR | Apple vs. GLG LIFE TECH | Apple vs. Jacquet Metal Service |
| SAF Holland vs. Science Applications International | SAF Holland vs. INFORMATION SVC GRP | SAF Holland vs. DATANG INTL POW | SAF Holland vs. THORNEY TECHS LTD |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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