Correlation Between Apple and New York

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Apple and New York 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 New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and New York Community, you can compare the effects of market volatilities on Apple and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and New York.

Diversification Opportunities for Apple and New York

0.82
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Apple and New is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and New York Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Community 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Community has no effect on the direction of Apple i.e., Apple and New York go up and down completely randomly.

Pair Corralation between Apple and New York

Assuming the 90 days trading horizon Apple is expected to generate 1.37 times less return on investment than New York. But when comparing it to its historical volatility, Apple Inc is 2.91 times less risky than New York. It trades about 0.23 of its potential returns per unit of risk. New York Community is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  985.00  in New York Community on September 5, 2024 and sell it today you would earn a total of  155.00  from holding New York Community or generate 15.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy97.67%
ValuesDaily Returns

Apple Inc  vs.  New York Community

 Performance 
       Timeline  
Apple Inc 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.
New York Community 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in New York Community are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, New York reported solid returns over the last few months and may actually be approaching a breakup point.

Apple and New York Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apple and New York

The main advantage of trading using opposite Apple and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.
The idea behind Apple Inc and New York Community pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

Other Complementary Tools

Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Bonds Directory
Find actively traded corporate debentures issued by US companies
Global Correlations
Find global opportunities by holding instruments from different markets