Correlation Between Apple and MBANK
Can any of the company-specific risk be diversified away by investing in both Apple and MBANK 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 MBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and MBANK, you can compare the effects of market volatilities on Apple and MBANK 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 MBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and MBANK.
Diversification Opportunities for Apple and MBANK
Excellent diversification
The 3 months correlation between Apple and MBANK is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and MBANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBANK 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 MBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBANK has no effect on the direction of Apple i.e., Apple and MBANK go up and down completely randomly.
Pair Corralation between Apple and MBANK
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.65 times more return on investment than MBANK. However, Apple Inc is 1.54 times less risky than MBANK. It trades about 0.08 of its potential returns per unit of risk. MBANK is currently generating about 0.02 per unit of risk. If you would invest 17,415 in Apple Inc on September 14, 2024 and sell it today you would earn a total of 6,200 from holding Apple Inc or generate 35.6% 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. MBANK
Performance |
| Timeline |
| Apple Inc |
| MBANK |
Apple and MBANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and MBANK
The main advantage of trading using opposite Apple and MBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, MBANK 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 MBANK will offset losses from the drop in MBANK's long position.| Apple vs. Spirent Communications plc | Apple vs. Evolution Mining Limited | Apple vs. CHINA TELECOM H | Apple vs. Harmony Gold Mining |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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