Correlation Between Apple and AT S
Can any of the company-specific risk be diversified away by investing in both Apple and AT S 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 AT S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and AT S Austria, you can compare the effects of market volatilities on Apple and AT S 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 AT S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and AT S.
Diversification Opportunities for Apple and AT S
Very good diversification
The 3 months correlation between Apple and AUS is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and AT S Austria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AT S Austria 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 AT S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AT S Austria has no effect on the direction of Apple i.e., Apple and AT S go up and down completely randomly.
Pair Corralation between Apple and AT S
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.56 times more return on investment than AT S. However, Apple Inc is 1.78 times less risky than AT S. It trades about 0.08 of its potential returns per unit of risk. AT S Austria is currently generating about -0.06 per unit of risk. If you would invest 13,231 in Apple Inc on September 4, 2024 and sell it today you would earn a total of 9,584 from holding Apple Inc or generate 72.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. AT S Austria
Performance |
| Timeline |
| Apple Inc |
| AT S Austria |
Apple and AT S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and AT S
The main advantage of trading using opposite Apple and AT S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, AT S 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 AT S will offset losses from the drop in AT S's long position.| Apple vs. METTLER TOLEDO INTL | Apple vs. METTLER TOLEDO INTL | Apple vs. Mitie Group PLC | Apple vs. LODESTAR MIN |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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