Correlation Between Apple and SAMS INTERNAT
Can any of the company-specific risk be diversified away by investing in both Apple and SAMS INTERNAT 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 SAMS INTERNAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and SAMS INTERNAT R, you can compare the effects of market volatilities on Apple and SAMS INTERNAT 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 SAMS INTERNAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SAMS INTERNAT.
Diversification Opportunities for Apple and SAMS INTERNAT
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apple and SAMS is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SAMS INTERNAT R in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMS INTERNAT R 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 SAMS INTERNAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAMS INTERNAT R has no effect on the direction of Apple i.e., Apple and SAMS INTERNAT go up and down completely randomly.
Pair Corralation between Apple and SAMS INTERNAT
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the SAMS INTERNAT. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.4 times less risky than SAMS INTERNAT. The stock trades about -0.52 of its potential returns per unit of risk. The SAMS INTERNAT R is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 265.00 in SAMS INTERNAT R on October 24, 2024 and sell it today you would earn a total of 4.00 from holding SAMS INTERNAT R or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. SAMS INTERNAT R
Performance |
| Timeline |
| Apple Inc |
| SAMS INTERNAT R |
Apple and SAMS INTERNAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and SAMS INTERNAT
The main advantage of trading using opposite Apple and SAMS INTERNAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, SAMS INTERNAT 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 SAMS INTERNAT will offset losses from the drop in SAMS INTERNAT's long position.| Apple vs. TERADATA | Apple vs. China Datang | Apple vs. SERI INDUSTRIAL EO | Apple vs. Perseus Mining Limited |
| SAMS INTERNAT vs. Apple Inc | SAMS INTERNAT vs. Apple Inc | SAMS INTERNAT vs. Apple Inc | SAMS INTERNAT 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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