Correlation Between Apple and BANK HANDLOWY
Can any of the company-specific risk be diversified away by investing in both Apple and BANK HANDLOWY 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 BANK HANDLOWY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and BANK HANDLOWY, you can compare the effects of market volatilities on Apple and BANK HANDLOWY 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 BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and BANK HANDLOWY.
Diversification Opportunities for Apple and BANK HANDLOWY
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Apple and BANK is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY 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 BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of Apple i.e., Apple and BANK HANDLOWY go up and down completely randomly.
Pair Corralation between Apple and BANK HANDLOWY
Assuming the 90 days trading horizon Apple Inc is expected to generate 3.06 times more return on investment than BANK HANDLOWY. However, Apple is 3.06 times more volatile than BANK HANDLOWY. It trades about 0.18 of its potential returns per unit of risk. BANK HANDLOWY is currently generating about -0.35 per unit of risk. If you would invest 21,210 in Apple Inc on August 31, 2024 and sell it today you would earn a total of 1,105 from holding Apple Inc or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. BANK HANDLOWY
Performance |
| Timeline |
| Apple Inc |
| BANK HANDLOWY |
Apple and BANK HANDLOWY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and BANK HANDLOWY
The main advantage of trading using opposite Apple and BANK HANDLOWY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, BANK HANDLOWY 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 BANK HANDLOWY will offset losses from the drop in BANK HANDLOWY's long position.| Apple vs. X Fab Silicon | Apple vs. UPDATE SOFTWARE | Apple vs. ATOSS SOFTWARE | Apple vs. Alfa Financial Software |
| BANK HANDLOWY vs. Transport International Holdings | BANK HANDLOWY vs. JAPAN TOBACCO UNSPADR12 | BANK HANDLOWY vs. COPLAND ROAD CAPITAL | BANK HANDLOWY vs. Liberty Broadband |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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