Correlation Between Apple and SEB SA
Can any of the company-specific risk be diversified away by investing in both Apple and SEB SA 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 SEB SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and SEB SA, you can compare the effects of market volatilities on Apple and SEB SA 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 SEB SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SEB SA.
Diversification Opportunities for Apple and SEB SA
Pay attention - limited upside
The 3 months correlation between Apple and SEB is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SEB SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEB 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 SEB SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEB SA has no effect on the direction of Apple i.e., Apple and SEB SA go up and down completely randomly.
Pair Corralation between Apple and SEB SA
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.83 times more return on investment than SEB SA. However, Apple Inc is 1.2 times less risky than SEB SA. It trades about 0.07 of its potential returns per unit of risk. SEB SA is currently generating about -0.02 per unit of risk. If you would invest 16,336 in Apple Inc on October 16, 2024 and sell it today you would earn a total of 6,429 from holding Apple Inc or generate 39.35% 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. SEB SA
Performance |
| Timeline |
| Apple Inc |
| SEB SA |
Apple and SEB SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and SEB SA
The main advantage of trading using opposite Apple and SEB SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, SEB SA 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 SEB SA will offset losses from the drop in SEB SA's long position.| Apple vs. CompuGroup Medical SE | Apple vs. Cleanaway Waste Management | Apple vs. Lamar Advertising | Apple vs. NorAm Drilling AS |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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