Correlation Between Apple and LEWAG HOLDING
Can any of the company-specific risk be diversified away by investing in both Apple and LEWAG HOLDING 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 LEWAG HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and LEWAG HOLDING AG, you can compare the effects of market volatilities on Apple and LEWAG HOLDING 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 LEWAG HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and LEWAG HOLDING.
Diversification Opportunities for Apple and LEWAG HOLDING
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and LEWAG is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and LEWAG HOLDING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEWAG HOLDING AG 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 LEWAG HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEWAG HOLDING AG has no effect on the direction of Apple i.e., Apple and LEWAG HOLDING go up and down completely randomly.
Pair Corralation between Apple and LEWAG HOLDING
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.38 times more return on investment than LEWAG HOLDING. However, Apple Inc is 2.6 times less risky than LEWAG HOLDING. It trades about 0.41 of its potential returns per unit of risk. LEWAG HOLDING AG is currently generating about -0.03 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. LEWAG HOLDING AG
Performance |
| Timeline |
| Apple Inc |
| LEWAG HOLDING AG |
Apple and LEWAG HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and LEWAG HOLDING
The main advantage of trading using opposite Apple and LEWAG HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, LEWAG HOLDING 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 LEWAG HOLDING will offset losses from the drop in LEWAG HOLDING'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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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