Correlation Between Apple and KLOECKNER
Can any of the company-specific risk be diversified away by investing in both Apple and KLOECKNER 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 KLOECKNER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and KLOECKNER N , you can compare the effects of market volatilities on Apple and KLOECKNER 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 KLOECKNER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and KLOECKNER.
Diversification Opportunities for Apple and KLOECKNER
Very good diversification
The 3 months correlation between Apple and KLOECKNER is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and KLOECKNER N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLOECKNER N 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 KLOECKNER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLOECKNER N has no effect on the direction of Apple i.e., Apple and KLOECKNER go up and down completely randomly.
Pair Corralation between Apple and KLOECKNER
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.79 times more return on investment than KLOECKNER. However, Apple Inc is 1.26 times less risky than KLOECKNER. It trades about 0.07 of its potential returns per unit of risk. KLOECKNER N is currently generating about -0.05 per unit of risk. If you would invest 13,771 in Apple Inc on August 24, 2024 and sell it today you would earn a total of 8,064 from holding Apple Inc or generate 58.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. KLOECKNER N
Performance |
| Timeline |
| Apple Inc |
| KLOECKNER N |
Apple and KLOECKNER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and KLOECKNER
The main advantage of trading using opposite Apple and KLOECKNER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, KLOECKNER 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 KLOECKNER will offset losses from the drop in KLOECKNER's long position.| Apple vs. Mitsubishi Gas Chemical | Apple vs. GREENX METALS LTD | Apple vs. KENNAMETAL INC | Apple vs. Evolution Mining Limited |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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