Correlation Between Apple and ALLEGROEU
Can any of the company-specific risk be diversified away by investing in both Apple and ALLEGROEU 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 ALLEGROEU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and ALLEGROEU ZY 01, you can compare the effects of market volatilities on Apple and ALLEGROEU 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 ALLEGROEU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and ALLEGROEU.
Diversification Opportunities for Apple and ALLEGROEU
Pay attention - limited upside
The 3 months correlation between Apple and ALLEGROEU is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ALLEGROEU ZY 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLEGROEU ZY 01 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 ALLEGROEU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLEGROEU ZY 01 has no effect on the direction of Apple i.e., Apple and ALLEGROEU go up and down completely randomly.
Pair Corralation between Apple and ALLEGROEU
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.22 times more return on investment than ALLEGROEU. However, Apple Inc is 4.52 times less risky than ALLEGROEU. It trades about 0.76 of its potential returns per unit of risk. ALLEGROEU ZY 01 is currently generating about -0.22 per unit of risk. If you would invest 21,145 in Apple Inc on September 13, 2024 and sell it today you would earn a total of 2,500 from holding Apple Inc or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. ALLEGROEU ZY 01
Performance |
| Timeline |
| Apple Inc |
| ALLEGROEU ZY 01 |
Apple and ALLEGROEU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and ALLEGROEU
The main advantage of trading using opposite Apple and ALLEGROEU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, ALLEGROEU 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 ALLEGROEU will offset losses from the drop in ALLEGROEU's long position.| Apple vs. Spirent Communications plc | Apple vs. Evolution Mining Limited | Apple vs. CHINA TELECOM H | Apple vs. Harmony Gold Mining |
| ALLEGROEU vs. INSURANCE AUST GRP | ALLEGROEU vs. Zijin Mining Group | ALLEGROEU vs. Harmony Gold Mining | ALLEGROEU vs. SBI Insurance 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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