Correlation Between Apple and SINOPEC OILFIELD-H-
Can any of the company-specific risk be diversified away by investing in both Apple and SINOPEC OILFIELD-H- 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 SINOPEC OILFIELD-H- into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and SINOPEC OILFIELD H , you can compare the effects of market volatilities on Apple and SINOPEC OILFIELD-H- 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 SINOPEC OILFIELD-H-. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SINOPEC OILFIELD-H-.
Diversification Opportunities for Apple and SINOPEC OILFIELD-H-
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and SINOPEC is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SINOPEC OILFIELD H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINOPEC OILFIELD-H- 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 SINOPEC OILFIELD-H-. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINOPEC OILFIELD-H- has no effect on the direction of Apple i.e., Apple and SINOPEC OILFIELD-H- go up and down completely randomly.
Pair Corralation between Apple and SINOPEC OILFIELD-H-
Assuming the 90 days trading horizon Apple is expected to generate 1.89 times less return on investment than SINOPEC OILFIELD-H-. But when comparing it to its historical volatility, Apple Inc is 3.95 times less risky than SINOPEC OILFIELD-H-. It trades about 0.08 of its potential returns per unit of risk. SINOPEC OILFIELD H is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5.35 in SINOPEC OILFIELD H on September 2, 2024 and sell it today you would earn a total of 1.35 from holding SINOPEC OILFIELD H or generate 25.23% 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. SINOPEC OILFIELD H
Performance |
| Timeline |
| Apple Inc |
| SINOPEC OILFIELD-H- |
Apple and SINOPEC OILFIELD-H- Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and SINOPEC OILFIELD-H-
The main advantage of trading using opposite Apple and SINOPEC OILFIELD-H- positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, SINOPEC OILFIELD-H- 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 SINOPEC OILFIELD-H- will offset losses from the drop in SINOPEC OILFIELD-H-'s long position.The idea behind Apple Inc and SINOPEC OILFIELD H 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.| SINOPEC OILFIELD-H- vs. Safety Insurance Group | SINOPEC OILFIELD-H- vs. Selective Insurance Group | SINOPEC OILFIELD-H- vs. Reinsurance Group of | SINOPEC OILFIELD-H- vs. Carsales |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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