Correlation Between Apple and SCOTT TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Apple and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and SCOTT TECHNOLOGY, you can compare the effects of market volatilities on Apple and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SCOTT TECHNOLOGY.
Diversification Opportunities for Apple and SCOTT TECHNOLOGY
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apple and SCOTT is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of Apple i.e., Apple and SCOTT TECHNOLOGY go up and down completely randomly.
Pair Corralation between Apple and SCOTT TECHNOLOGY
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the SCOTT TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.39 times less risky than SCOTT TECHNOLOGY. The stock trades about -0.49 of its potential returns per unit of risk. The SCOTT TECHNOLOGY is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 120.00 in SCOTT TECHNOLOGY on October 28, 2024 and sell it today you would earn a total of 2.00 from holding SCOTT TECHNOLOGY or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. SCOTT TECHNOLOGY
Performance |
| Timeline |
| Apple Inc |
| SCOTT TECHNOLOGY |
Apple and SCOTT TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and SCOTT TECHNOLOGY
The main advantage of trading using opposite Apple and SCOTT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY will offset losses from the drop in SCOTT TECHNOLOGY's long position.| Apple vs. SCANSOURCE | Apple vs. Nok Airlines PCL | Apple vs. GOODYEAR T RUBBER | Apple vs. Mitsubishi Materials |
| SCOTT TECHNOLOGY vs. INTERCONT HOTELS | SCOTT TECHNOLOGY vs. LANDSEA GREEN MANAGEMENT | SCOTT TECHNOLOGY vs. PPHE HOTEL GROUP | SCOTT TECHNOLOGY vs. Ares Management Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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