Correlation Between Apple and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both Apple and GOLD ROAD 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 GOLD ROAD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and GOLD ROAD RES, you can compare the effects of market volatilities on Apple and GOLD ROAD 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 GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and GOLD ROAD.
Diversification Opportunities for Apple and GOLD ROAD
Poor diversification
The 3 months correlation between Apple and GOLD is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES 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 GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of Apple i.e., Apple and GOLD ROAD go up and down completely randomly.
Pair Corralation between Apple and GOLD ROAD
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.48 times more return on investment than GOLD ROAD. However, Apple Inc is 2.09 times less risky than GOLD ROAD. It trades about 0.1 of its potential returns per unit of risk. GOLD ROAD RES is currently generating about 0.02 per unit of risk. If you would invest 12,057 in Apple Inc on August 28, 2024 and sell it today you would earn a total of 10,348 from holding Apple Inc or generate 85.83% 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. GOLD ROAD RES
Performance |
| Timeline |
| Apple Inc |
| GOLD ROAD RES |
Apple and GOLD ROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and GOLD ROAD
The main advantage of trading using opposite Apple and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, GOLD ROAD 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 GOLD ROAD will offset losses from the drop in GOLD ROAD's long position.| Apple vs. Cass Information Systems | Apple vs. Hyrican Informationssysteme Aktiengesellschaft | Apple vs. PUBLIC STORAGE PRFO | Apple vs. DOCDATA |
| GOLD ROAD vs. FARO Technologies | GOLD ROAD vs. REGAL ASIAN INVESTMENTS | GOLD ROAD vs. MGIC INVESTMENT | GOLD ROAD vs. THORNEY TECHS LTD |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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