Correlation Between Apple and FIH MOBILE
Can any of the company-specific risk be diversified away by investing in both Apple and FIH MOBILE 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 FIH MOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and FIH MOBILE, you can compare the effects of market volatilities on Apple and FIH MOBILE 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 FIH MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and FIH MOBILE.
Diversification Opportunities for Apple and FIH MOBILE
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apple and FIH is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and FIH MOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIH MOBILE 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 FIH MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIH MOBILE has no effect on the direction of Apple i.e., Apple and FIH MOBILE go up and down completely randomly.
Pair Corralation between Apple and FIH MOBILE
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the FIH MOBILE. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.5 times less risky than FIH MOBILE. The stock trades about -0.51 of its potential returns per unit of risk. The FIH MOBILE is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 10.00 in FIH MOBILE on October 23, 2024 and sell it today you would earn a total of 1.00 from holding FIH MOBILE or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Apple Inc vs. FIH MOBILE
Performance |
| Timeline |
| Apple Inc |
| FIH MOBILE |
Apple and FIH MOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and FIH MOBILE
The main advantage of trading using opposite Apple and FIH MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, FIH MOBILE 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 FIH MOBILE will offset losses from the drop in FIH MOBILE's long position.| Apple vs. Japan Medical Dynamic | Apple vs. Mitsubishi Gas Chemical | Apple vs. CompuGroup Medical SE | Apple vs. IMAGIN MEDICAL INC |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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