Correlation Between Apple and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both Apple and INSURANCE AUST 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 INSURANCE AUST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and INSURANCE AUST GRP, you can compare the effects of market volatilities on Apple and INSURANCE AUST 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 INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and INSURANCE AUST.
Diversification Opportunities for Apple and INSURANCE AUST
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apple and INSURANCE is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP 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 INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of Apple i.e., Apple and INSURANCE AUST go up and down completely randomly.
Pair Corralation between Apple and INSURANCE AUST
Assuming the 90 days trading horizon Apple is expected to generate 1.21 times less return on investment than INSURANCE AUST. But when comparing it to its historical volatility, Apple Inc is 1.1 times less risky than INSURANCE AUST. It trades about 0.08 of its potential returns per unit of risk. INSURANCE AUST GRP is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 271.00 in INSURANCE AUST GRP on August 28, 2024 and sell it today you would earn a total of 229.00 from holding INSURANCE AUST GRP or generate 84.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. INSURANCE AUST GRP
Performance |
| Timeline |
| Apple Inc |
| INSURANCE AUST GRP |
Apple and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and INSURANCE AUST
The main advantage of trading using opposite Apple and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, INSURANCE AUST 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 INSURANCE AUST will offset losses from the drop in INSURANCE AUST's long position.| Apple vs. Summit Materials | Apple vs. Lion One Metals | Apple vs. SANOK RUBBER ZY | Apple vs. Goodyear Tire Rubber |
| INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Microsoft |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| CEOs Directory Screen CEOs from public companies around the world |