Correlation Between Apple and PEEL MINING
Can any of the company-specific risk be diversified away by investing in both Apple and PEEL MINING 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 PEEL MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and PEEL MINING, you can compare the effects of market volatilities on Apple and PEEL MINING 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 PEEL MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and PEEL MINING.
Diversification Opportunities for Apple and PEEL MINING
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and PEEL is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and PEEL MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEEL MINING 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 PEEL MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEEL MINING has no effect on the direction of Apple i.e., Apple and PEEL MINING go up and down completely randomly.
Pair Corralation between Apple and PEEL MINING
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.3 times more return on investment than PEEL MINING. However, Apple Inc is 3.3 times less risky than PEEL MINING. It trades about 0.39 of its potential returns per unit of risk. PEEL MINING is currently generating about 0.04 per unit of risk. If you would invest 20,461 in Apple Inc on September 2, 2024 and sell it today you would earn a total of 1,974 from holding Apple Inc or generate 9.65% 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. PEEL MINING
Performance |
| Timeline |
| Apple Inc |
| PEEL MINING |
Apple and PEEL MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and PEEL MINING
The main advantage of trading using opposite Apple and PEEL MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, PEEL MINING 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 PEEL MINING will offset losses from the drop in PEEL MINING's long position.| Apple vs. Strategic Investments AS | Apple vs. Gladstone Investment | Apple vs. SEI INVESTMENTS | Apple vs. EAT WELL INVESTMENT |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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