Correlation Between Apple and SOS
Can any of the company-specific risk be diversified away by investing in both Apple and SOS 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 SOS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and SOS LTD A, you can compare the effects of market volatilities on Apple and SOS 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 SOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SOS.
Diversification Opportunities for Apple and SOS
Average diversification
The 3 months correlation between Apple and SOS is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SOS LTD A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOS LTD A 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 SOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOS LTD A has no effect on the direction of Apple i.e., Apple and SOS go up and down completely randomly.
Pair Corralation between Apple and SOS
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.03 times more return on investment than SOS. However, Apple Inc is 31.62 times less risky than SOS. It trades about 0.72 of its potential returns per unit of risk. SOS LTD A is currently generating about -0.02 per unit of risk. If you would invest 21,350 in Apple Inc on September 15, 2024 and sell it today you would earn a total of 2,265 from holding Apple Inc or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Apple Inc vs. SOS LTD A
Performance |
| Timeline |
| Apple Inc |
| SOS LTD A |
Apple and SOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and SOS
The main advantage of trading using opposite Apple and SOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, SOS 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 SOS will offset losses from the drop in SOS's long position.| Apple vs. Hyrican Informationssysteme Aktiengesellschaft | Apple vs. DICKER DATA LTD | Apple vs. Public Storage | Apple vs. Data3 Limited |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |