Correlation Between Apple and AWILCO LNG
Can any of the company-specific risk be diversified away by investing in both Apple and AWILCO LNG 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 AWILCO LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and AWILCO LNG NK, you can compare the effects of market volatilities on Apple and AWILCO LNG 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 AWILCO LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and AWILCO LNG.
Diversification Opportunities for Apple and AWILCO LNG
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Apple and AWILCO is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and AWILCO LNG NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AWILCO LNG NK 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 AWILCO LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AWILCO LNG NK has no effect on the direction of Apple i.e., Apple and AWILCO LNG go up and down completely randomly.
Pair Corralation between Apple and AWILCO LNG
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.28 times more return on investment than AWILCO LNG. However, Apple Inc is 3.56 times less risky than AWILCO LNG. It trades about 0.09 of its potential returns per unit of risk. AWILCO LNG NK is currently generating about 0.01 per unit of risk. If you would invest 17,766 in Apple Inc on September 12, 2024 and sell it today you would earn a total of 6,124 from holding Apple Inc or generate 34.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. AWILCO LNG NK
Performance |
| Timeline |
| Apple Inc |
| AWILCO LNG NK |
Apple and AWILCO LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and AWILCO LNG
The main advantage of trading using opposite Apple and AWILCO LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, AWILCO LNG 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 AWILCO LNG will offset losses from the drop in AWILCO LNG's long position.The idea behind Apple Inc and AWILCO LNG NK 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.| AWILCO LNG vs. GALENA MINING LTD | AWILCO LNG vs. Tower One Wireless | AWILCO LNG vs. Zijin Mining Group | AWILCO LNG vs. Consolidated Communications Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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