Correlation Between Apple and Schnitzer Steel
Can any of the company-specific risk be diversified away by investing in both Apple and Schnitzer Steel 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 Schnitzer Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Schnitzer Steel Industries, you can compare the effects of market volatilities on Apple and Schnitzer Steel 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 Schnitzer Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Schnitzer Steel.
Diversification Opportunities for Apple and Schnitzer Steel
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apple and Schnitzer is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Schnitzer Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schnitzer Steel Indu 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 Schnitzer Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schnitzer Steel Indu has no effect on the direction of Apple i.e., Apple and Schnitzer Steel go up and down completely randomly.
Pair Corralation between Apple and Schnitzer Steel
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.29 times more return on investment than Schnitzer Steel. However, Apple Inc is 3.46 times less risky than Schnitzer Steel. It trades about -0.45 of its potential returns per unit of risk. Schnitzer Steel Industries is currently generating about -0.13 per unit of risk. If you would invest 24,495 in Apple Inc on October 25, 2024 and sell it today you would lose (3,115) from holding Apple Inc or give up 12.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Schnitzer Steel Industries
Performance |
| Timeline |
| Apple Inc |
| Schnitzer Steel Indu |
Apple and Schnitzer Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Schnitzer Steel
The main advantage of trading using opposite Apple and Schnitzer Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Schnitzer Steel 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 Schnitzer Steel will offset losses from the drop in Schnitzer Steel's long position.| Apple vs. Global Ship Lease | Apple vs. Air Lease | Apple vs. SCANSOURCE | Apple vs. GRENKELEASING Dusseldorf |
| Schnitzer Steel vs. Nishi Nippon Railroad Co | Schnitzer Steel vs. Fuji Media Holdings | Schnitzer Steel vs. Air Transport Services | Schnitzer Steel vs. TOWNSQUARE MEDIA 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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