Correlation Between Apple and REGION GROUP
Can any of the company-specific risk be diversified away by investing in both Apple and REGION GROUP 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 REGION GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and REGION GROUP STAPLED, you can compare the effects of market volatilities on Apple and REGION GROUP 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 REGION GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and REGION GROUP.
Diversification Opportunities for Apple and REGION GROUP
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and REGION is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and REGION GROUP STAPLED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGION GROUP STAPLED 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 REGION GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGION GROUP STAPLED has no effect on the direction of Apple i.e., Apple and REGION GROUP go up and down completely randomly.
Pair Corralation between Apple and REGION GROUP
Assuming the 90 days trading horizon Apple Inc is expected to generate 1.21 times more return on investment than REGION GROUP. However, Apple is 1.21 times more volatile than REGION GROUP STAPLED. It trades about 0.13 of its potential returns per unit of risk. REGION GROUP STAPLED is currently generating about 0.06 per unit of risk. If you would invest 17,527 in Apple Inc on August 29, 2024 and sell it today you would earn a total of 4,883 from holding Apple Inc or generate 27.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. REGION GROUP STAPLED
Performance |
| Timeline |
| Apple Inc |
| REGION GROUP STAPLED |
Apple and REGION GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and REGION GROUP
The main advantage of trading using opposite Apple and REGION GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, REGION GROUP 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 REGION GROUP will offset losses from the drop in REGION GROUP's long position.| Apple vs. Treasury Wine Estates | Apple vs. Daito Trust Construction | Apple vs. Granite Construction | Apple vs. TITAN MACHINERY |
| REGION GROUP vs. Apple Inc | REGION GROUP vs. Apple Inc | REGION GROUP vs. Apple Inc | REGION GROUP vs. Apple Inc |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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