Correlation Between Apple and GREENFIRST FORPRODINC

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Can any of the company-specific risk be diversified away by investing in both Apple and GREENFIRST FORPRODINC 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 GREENFIRST FORPRODINC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and GREENFIRST FORPRODINC, you can compare the effects of market volatilities on Apple and GREENFIRST FORPRODINC 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 GREENFIRST FORPRODINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and GREENFIRST FORPRODINC.

Diversification Opportunities for Apple and GREENFIRST FORPRODINC

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Apple and GREENFIRST is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and GREENFIRST FORPRODINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENFIRST FORPRODINC 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 GREENFIRST FORPRODINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENFIRST FORPRODINC has no effect on the direction of Apple i.e., Apple and GREENFIRST FORPRODINC go up and down completely randomly.

Pair Corralation between Apple and GREENFIRST FORPRODINC

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.21 times more return on investment than GREENFIRST FORPRODINC. However, Apple Inc is 4.67 times less risky than GREENFIRST FORPRODINC. It trades about 0.11 of its potential returns per unit of risk. GREENFIRST FORPRODINC is currently generating about 0.0 per unit of risk. If you would invest  11,792  in Apple Inc on September 26, 2024 and sell it today you would earn a total of  12,698  from holding Apple Inc or generate 107.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.21%
ValuesDaily Returns

Apple Inc  vs.  GREENFIRST FORPRODINC

 Performance 
       Timeline  
Apple Inc 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental indicators, Apple sustained solid returns over the last few months and may actually be approaching a breakup point.
GREENFIRST FORPRODINC 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in GREENFIRST FORPRODINC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, GREENFIRST FORPRODINC reported solid returns over the last few months and may actually be approaching a breakup point.

Apple and GREENFIRST FORPRODINC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apple and GREENFIRST FORPRODINC

The main advantage of trading using opposite Apple and GREENFIRST FORPRODINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, GREENFIRST FORPRODINC 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 GREENFIRST FORPRODINC will offset losses from the drop in GREENFIRST FORPRODINC's long position.
The idea behind Apple Inc and GREENFIRST FORPRODINC 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.
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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