Correlation Between Apple and SECURITAS
Can any of the company-specific risk be diversified away by investing in both Apple and SECURITAS 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 SECURITAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and SECURITAS B , you can compare the effects of market volatilities on Apple and SECURITAS 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 SECURITAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SECURITAS.
Diversification Opportunities for Apple and SECURITAS
Poor diversification
The 3 months correlation between Apple and SECURITAS is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SECURITAS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECURITAS B 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 SECURITAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECURITAS B has no effect on the direction of Apple i.e., Apple and SECURITAS go up and down completely randomly.
Pair Corralation between Apple and SECURITAS
Assuming the 90 days trading horizon Apple is expected to generate 2.76 times less return on investment than SECURITAS. But when comparing it to its historical volatility, Apple Inc is 2.49 times less risky than SECURITAS. It trades about 0.13 of its potential returns per unit of risk. SECURITAS B is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 964.00 in SECURITAS B on August 29, 2024 and sell it today you would earn a total of 204.00 from holding SECURITAS B or generate 21.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. SECURITAS B
Performance |
| Timeline |
| Apple Inc |
| SECURITAS B |
Apple and SECURITAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and SECURITAS
The main advantage of trading using opposite Apple and SECURITAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, SECURITAS 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 SECURITAS will offset losses from the drop in SECURITAS's long position.| Apple vs. Cellnex Telecom SA | Apple vs. Spirent Communications plc | Apple vs. Ribbon Communications | Apple vs. Perseus Mining Limited |
| SECURITAS vs. Apple Inc | SECURITAS vs. Apple Inc | SECURITAS vs. Superior Plus Corp | SECURITAS vs. SIVERS SEMICONDUCTORS AB |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |