Correlation Between Apple and ALIOR BANK
Can any of the company-specific risk be diversified away by investing in both Apple and ALIOR BANK 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 ALIOR BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and ALIOR BANK, you can compare the effects of market volatilities on Apple and ALIOR BANK 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 ALIOR BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and ALIOR BANK.
Diversification Opportunities for Apple and ALIOR BANK
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and ALIOR is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ALIOR BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALIOR BANK 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 ALIOR BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALIOR BANK has no effect on the direction of Apple i.e., Apple and ALIOR BANK go up and down completely randomly.
Pair Corralation between Apple and ALIOR BANK
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.37 times more return on investment than ALIOR BANK. However, Apple Inc is 2.7 times less risky than ALIOR BANK. It trades about 0.41 of its potential returns per unit of risk. ALIOR BANK is currently generating about 0.11 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. ALIOR BANK
Performance |
| Timeline |
| Apple Inc |
| ALIOR BANK |
Apple and ALIOR BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and ALIOR BANK
The main advantage of trading using opposite Apple and ALIOR BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, ALIOR BANK 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 ALIOR BANK will offset losses from the drop in ALIOR BANK's long position.| Apple vs. Tsingtao Brewery | Apple vs. AM EAGLE OUTFITTERS | Apple vs. HOCHSCHILD MINING | Apple vs. OURGAME INTHOLDL 00005 |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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