Correlation Between Apple and CARETRUST REIT
Can any of the company-specific risk be diversified away by investing in both Apple and CARETRUST REIT 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 CARETRUST REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and CARETRUST REIT DL 01, you can compare the effects of market volatilities on Apple and CARETRUST REIT 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 CARETRUST REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and CARETRUST REIT.
Diversification Opportunities for Apple and CARETRUST REIT
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apple and CARETRUST is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and CARETRUST REIT DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARETRUST REIT DL 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 CARETRUST REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARETRUST REIT DL has no effect on the direction of Apple i.e., Apple and CARETRUST REIT go up and down completely randomly.
Pair Corralation between Apple and CARETRUST REIT
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.59 times more return on investment than CARETRUST REIT. However, Apple Inc is 1.69 times less risky than CARETRUST REIT. It trades about 0.41 of its potential returns per unit of risk. CARETRUST REIT DL 01 is currently generating about -0.12 per unit of risk. If you would invest 20,560 in Apple Inc on September 2, 2024 and sell it today you would earn a total of 1,890 from holding Apple Inc or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. CARETRUST REIT DL 01
Performance |
| Timeline |
| Apple Inc |
| CARETRUST REIT DL |
Apple and CARETRUST REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and CARETRUST REIT
The main advantage of trading using opposite Apple and CARETRUST REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, CARETRUST REIT 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 CARETRUST REIT will offset losses from the drop in CARETRUST REIT's long position.| Apple vs. Tsingtao Brewery | Apple vs. AM EAGLE OUTFITTERS | Apple vs. HOCHSCHILD MINING | Apple vs. OURGAME INTHOLDL 00005 |
| CARETRUST REIT vs. Apple Inc | CARETRUST REIT vs. Apple Inc | CARETRUST REIT vs. Apple Inc | CARETRUST REIT 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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