Correlation Between Apple and SM WIRTSCHAFTSBER
Can any of the company-specific risk be diversified away by investing in both Apple and SM WIRTSCHAFTSBER 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 SM WIRTSCHAFTSBER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and SM WIRTSCHAFTSBER N, you can compare the effects of market volatilities on Apple and SM WIRTSCHAFTSBER 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 SM WIRTSCHAFTSBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SM WIRTSCHAFTSBER.
Diversification Opportunities for Apple and SM WIRTSCHAFTSBER
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Apple and SMWN is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SM WIRTSCHAFTSBER N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM WIRTSCHAFTSBER 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 SM WIRTSCHAFTSBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM WIRTSCHAFTSBER has no effect on the direction of Apple i.e., Apple and SM WIRTSCHAFTSBER go up and down completely randomly.
Pair Corralation between Apple and SM WIRTSCHAFTSBER
Assuming the 90 days trading horizon Apple Inc is expected to generate 1.05 times more return on investment than SM WIRTSCHAFTSBER. However, Apple is 1.05 times more volatile than SM WIRTSCHAFTSBER N. It trades about 0.03 of its potential returns per unit of risk. SM WIRTSCHAFTSBER N is currently generating about -0.19 per unit of risk. If you would invest 22,736 in Apple Inc on December 2, 2024 and sell it today you would earn a total of 139.00 from holding Apple Inc or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. SM WIRTSCHAFTSBER N
Performance |
| Timeline |
| Apple Inc |
| SM WIRTSCHAFTSBER |
Apple and SM WIRTSCHAFTSBER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and SM WIRTSCHAFTSBER
The main advantage of trading using opposite Apple and SM WIRTSCHAFTSBER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, SM WIRTSCHAFTSBER 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 SM WIRTSCHAFTSBER will offset losses from the drop in SM WIRTSCHAFTSBER's long position.| Apple vs. De Grey Mining | ||
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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