Correlation Between Apple and BROOKDALE
Can any of the company-specific risk be diversified away by investing in both Apple and BROOKDALE 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 BROOKDALE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and BROOKDALE SR LIVING, you can compare the effects of market volatilities on Apple and BROOKDALE 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 BROOKDALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and BROOKDALE.
Diversification Opportunities for Apple and BROOKDALE
Excellent diversification
The 3 months correlation between Apple and BROOKDALE is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and BROOKDALE SR LIVING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROOKDALE SR LIVING 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 BROOKDALE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROOKDALE SR LIVING has no effect on the direction of Apple i.e., Apple and BROOKDALE go up and down completely randomly.
Pair Corralation between Apple and BROOKDALE
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.38 times more return on investment than BROOKDALE. However, Apple Inc is 2.64 times less risky than BROOKDALE. It trades about 0.59 of its potential returns per unit of risk. BROOKDALE SR LIVING is currently generating about 0.03 per unit of risk. If you would invest 20,985 in Apple Inc on September 12, 2024 and sell it today you would earn a total of 2,515 from holding Apple Inc or generate 11.98% 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. BROOKDALE SR LIVING
Performance |
| Timeline |
| Apple Inc |
| BROOKDALE SR LIVING |
Apple and BROOKDALE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and BROOKDALE
The main advantage of trading using opposite Apple and BROOKDALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, BROOKDALE 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 BROOKDALE will offset losses from the drop in BROOKDALE's long position.| Apple vs. Aedas Homes SA | Apple vs. INFORMATION SVC GRP | Apple vs. Neinor Homes SA | Apple vs. Public Storage |
| BROOKDALE vs. FARO Technologies | BROOKDALE vs. DELTA AIR LINES | BROOKDALE vs. Altair Engineering | BROOKDALE vs. Digilife Technologies Limited |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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