Correlation Between Apple and OCEAN-GEOLOOP
Can any of the company-specific risk be diversified away by investing in both Apple and OCEAN-GEOLOOP 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 OCEAN-GEOLOOP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and OCEAN GEOLOOP AS NK, you can compare the effects of market volatilities on Apple and OCEAN-GEOLOOP 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 OCEAN-GEOLOOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and OCEAN-GEOLOOP.
Diversification Opportunities for Apple and OCEAN-GEOLOOP
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Apple and OCEAN-GEOLOOP is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and OCEAN GEOLOOP AS NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCEAN GEOLOOP AS 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 OCEAN-GEOLOOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCEAN GEOLOOP AS has no effect on the direction of Apple i.e., Apple and OCEAN-GEOLOOP go up and down completely randomly.
Pair Corralation between Apple and OCEAN-GEOLOOP
Assuming the 90 days trading horizon Apple is expected to generate 1.46 times less return on investment than OCEAN-GEOLOOP. But when comparing it to its historical volatility, Apple Inc is 6.58 times less risky than OCEAN-GEOLOOP. It trades about 0.26 of its potential returns per unit of risk. OCEAN GEOLOOP AS NK is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 36.00 in OCEAN GEOLOOP AS NK on November 28, 2024 and sell it today you would earn a total of 1.00 from holding OCEAN GEOLOOP AS NK or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Apple Inc vs. OCEAN GEOLOOP AS NK
Performance |
| Timeline |
| Apple Inc |
| OCEAN GEOLOOP AS |
Apple and OCEAN-GEOLOOP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and OCEAN-GEOLOOP
The main advantage of trading using opposite Apple and OCEAN-GEOLOOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, OCEAN-GEOLOOP 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 OCEAN-GEOLOOP will offset losses from the drop in OCEAN-GEOLOOP's long position.| Apple vs. Alibaba Health Information | Apple vs. Cass Information Systems | Apple vs. DATAGROUP SE | Apple vs. MINCO SILVER |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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