Correlation Between Apple and Neinor Homes
Can any of the company-specific risk be diversified away by investing in both Apple and Neinor Homes 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 Neinor Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Neinor Homes SA, you can compare the effects of market volatilities on Apple and Neinor Homes 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 Neinor Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Neinor Homes.
Diversification Opportunities for Apple and Neinor Homes
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and Neinor is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Neinor Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neinor Homes SA 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 Neinor Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neinor Homes SA has no effect on the direction of Apple i.e., Apple and Neinor Homes go up and down completely randomly.
Pair Corralation between Apple and Neinor Homes
Assuming the 90 days trading horizon Apple Inc is expected to generate 1.12 times more return on investment than Neinor Homes. However, Apple is 1.12 times more volatile than Neinor Homes SA. It trades about 0.14 of its potential returns per unit of risk. Neinor Homes SA is currently generating about 0.01 per unit of risk. If you would invest 21,489 in Apple Inc on August 28, 2024 and sell it today you would earn a total of 921.00 from holding Apple Inc or generate 4.29% 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. Neinor Homes SA
Performance |
| Timeline |
| Apple Inc |
| Neinor Homes SA |
Apple and Neinor Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Neinor Homes
The main advantage of trading using opposite Apple and Neinor Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Neinor Homes 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 Neinor Homes will offset losses from the drop in Neinor Homes' long position.| Apple vs. Treasury Wine Estates | Apple vs. Daito Trust Construction | Apple vs. Granite Construction | Apple vs. TITAN MACHINERY |
| Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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