Correlation Between Apple and OPERA SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Apple and OPERA SOFTWARE 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 OPERA SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and OPERA SOFTWARE, you can compare the effects of market volatilities on Apple and OPERA SOFTWARE 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 OPERA SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and OPERA SOFTWARE.
Diversification Opportunities for Apple and OPERA SOFTWARE
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and OPERA is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and OPERA SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPERA SOFTWARE 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 OPERA SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPERA SOFTWARE has no effect on the direction of Apple i.e., Apple and OPERA SOFTWARE go up and down completely randomly.
Pair Corralation between Apple and OPERA SOFTWARE
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.53 times more return on investment than OPERA SOFTWARE. However, Apple Inc is 1.88 times less risky than OPERA SOFTWARE. It trades about 0.02 of its potential returns per unit of risk. OPERA SOFTWARE is currently generating about 0.01 per unit of risk. If you would invest 23,500 in Apple Inc on October 12, 2024 and sell it today you would earn a total of 50.00 from holding Apple Inc or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. OPERA SOFTWARE
Performance |
| Timeline |
| Apple Inc |
| OPERA SOFTWARE |
Apple and OPERA SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and OPERA SOFTWARE
The main advantage of trading using opposite Apple and OPERA SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, OPERA SOFTWARE 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 OPERA SOFTWARE will offset losses from the drop in OPERA SOFTWARE's long position.| Apple vs. Vulcan Materials | Apple vs. VULCAN MATERIALS | Apple vs. Plastic Omnium | Apple vs. Eagle Materials |
| OPERA SOFTWARE vs. UNIQA INSURANCE GR | OPERA SOFTWARE vs. ZURICH INSURANCE GROUP | OPERA SOFTWARE vs. CARDINAL HEALTH | OPERA SOFTWARE vs. INSURANCE AUST GRP |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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