Correlation Between Apple and Westaim Corp
Can any of the company-specific risk be diversified away by investing in both Apple and Westaim Corp 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 Westaim Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and The Westaim Corp, you can compare the effects of market volatilities on Apple and Westaim Corp 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 Westaim Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Westaim Corp.
Diversification Opportunities for Apple and Westaim Corp
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and Westaim is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and The Westaim Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westaim Corp 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 Westaim Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westaim Corp has no effect on the direction of Apple i.e., Apple and Westaim Corp go up and down completely randomly.
Pair Corralation between Apple and Westaim Corp
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.95 times more return on investment than Westaim Corp. However, Apple Inc is 1.06 times less risky than Westaim Corp. It trades about 0.09 of its potential returns per unit of risk. The Westaim Corp is currently generating about 0.08 per unit of risk. If you would invest 16,082 in Apple Inc on October 16, 2024 and sell it today you would earn a total of 6,523 from holding Apple Inc or generate 40.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.68% |
| Values | Daily Returns |
Apple Inc vs. The Westaim Corp
Performance |
| Timeline |
| Apple Inc |
| Westaim Corp |
Apple and Westaim Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Westaim Corp
The main advantage of trading using opposite Apple and Westaim Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Westaim Corp 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 Westaim Corp will offset losses from the drop in Westaim Corp's long position.| Apple vs. National Retail Properties | Apple vs. Caseys General Stores | Apple vs. Firan Technology Group | Apple vs. Casio Computer CoLtd |
| Westaim Corp vs. MOBILE FACTORY INC | Westaim Corp vs. GAMESTOP | Westaim Corp vs. SOCKET MOBILE NEW | Westaim Corp vs. G III Apparel Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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