Correlation Between Apple and Esprinet SpA
Can any of the company-specific risk be diversified away by investing in both Apple and Esprinet SpA 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 Esprinet SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Esprinet SpA, you can compare the effects of market volatilities on Apple and Esprinet SpA 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 Esprinet SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Esprinet SpA.
Diversification Opportunities for Apple and Esprinet SpA
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Apple and Esprinet is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Esprinet SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esprinet SpA 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 Esprinet SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esprinet SpA has no effect on the direction of Apple i.e., Apple and Esprinet SpA go up and down completely randomly.
Pair Corralation between Apple and Esprinet SpA
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.33 times more return on investment than Esprinet SpA. However, Apple Inc is 2.99 times less risky than Esprinet SpA. It trades about 0.7 of its potential returns per unit of risk. Esprinet SpA is currently generating about 0.03 per unit of risk. If you would invest 21,890 in Apple Inc on September 25, 2024 and sell it today you would earn a total of 2,610 from holding Apple Inc or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Apple Inc vs. Esprinet SpA
Performance |
| Timeline |
| Apple Inc |
| Esprinet SpA |
Apple and Esprinet SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Esprinet SpA
The main advantage of trading using opposite Apple and Esprinet SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Esprinet SpA 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 Esprinet SpA will offset losses from the drop in Esprinet SpA's long position.The idea behind Apple Inc and Esprinet SpA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Esprinet SpA vs. Arrow Electronics | Esprinet SpA vs. DICKER DATA LTD | Esprinet SpA vs. KAGA EL LTD | Esprinet SpA vs. Wayside Technology Group |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |