Correlation Between Apple and KSB SE
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By analyzing existing cross correlation between Apple Inc and KSB SE Co, you can compare the effects of market volatilities on Apple and KSB SE 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 KSB SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and KSB SE.
Diversification Opportunities for Apple and KSB SE
Poor diversification
The 3 months correlation between Apple and KSB is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and KSB SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KSB SE 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 KSB SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KSB SE has no effect on the direction of Apple i.e., Apple and KSB SE go up and down completely randomly.
Pair Corralation between Apple and KSB SE
Assuming the 90 days trading horizon Apple is expected to generate 1.24 times less return on investment than KSB SE. But when comparing it to its historical volatility, Apple Inc is 1.06 times less risky than KSB SE. It trades about 0.08 of its potential returns per unit of risk. KSB SE Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 31,222 in KSB SE Co on September 2, 2024 and sell it today you would earn a total of 28,578 from holding KSB SE Co or generate 91.53% 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. KSB SE Co
Performance |
| Timeline |
| Apple Inc |
| KSB SE |
Apple and KSB SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and KSB SE
The main advantage of trading using opposite Apple and KSB SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, KSB SE 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 KSB SE will offset losses from the drop in KSB SE's long position.The idea behind Apple Inc and KSB SE Co 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.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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