Correlation Between Apple and Sto SE
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By analyzing existing cross correlation between Apple Inc and Sto SE Co, you can compare the effects of market volatilities on Apple and Sto 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 Sto SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Sto SE.
Diversification Opportunities for Apple and Sto SE
Excellent diversification
The 3 months correlation between Apple and Sto is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Sto SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sto 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 Sto SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sto SE has no effect on the direction of Apple i.e., Apple and Sto SE go up and down completely randomly.
Pair Corralation between Apple and Sto SE
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.46 times more return on investment than Sto SE. However, Apple Inc is 2.18 times less risky than Sto SE. It trades about 0.68 of its potential returns per unit of risk. Sto SE Co is currently generating about -0.26 per unit of risk. If you would invest 20,915 in Apple Inc on September 12, 2024 and sell it today you would earn a total of 2,975 from holding Apple Inc or generate 14.22% 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. Sto SE Co
Performance |
| Timeline |
| Apple Inc |
| Sto SE |
Apple and Sto SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Sto SE
The main advantage of trading using opposite Apple and Sto SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Sto 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 Sto SE will offset losses from the drop in Sto SE's long position.The idea behind Apple Inc and Sto 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.| Sto SE vs. Guidewire Software | Sto SE vs. China Resources Beer | Sto SE vs. Check Point Software | Sto SE vs. Monster Beverage Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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