Correlation Between Apple and SUN HUNG
Can any of the company-specific risk be diversified away by investing in both Apple and SUN HUNG 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 SUN HUNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and SUN HUNG KAI, you can compare the effects of market volatilities on Apple and SUN HUNG 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 SUN HUNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SUN HUNG.
Diversification Opportunities for Apple and SUN HUNG
Poor diversification
The 3 months correlation between Apple and SUN is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SUN HUNG KAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUN HUNG KAI 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 SUN HUNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUN HUNG KAI has no effect on the direction of Apple i.e., Apple and SUN HUNG go up and down completely randomly.
Pair Corralation between Apple and SUN HUNG
Assuming the 90 days trading horizon Apple is expected to generate 1.81 times less return on investment than SUN HUNG. But when comparing it to its historical volatility, Apple Inc is 2.35 times less risky than SUN HUNG. It trades about 0.13 of its potential returns per unit of risk. SUN HUNG KAI is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 625.00 in SUN HUNG KAI on August 30, 2024 and sell it today you would earn a total of 285.00 from holding SUN HUNG KAI or generate 45.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. SUN HUNG KAI
Performance |
| Timeline |
| Apple Inc |
| SUN HUNG KAI |
Apple and SUN HUNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and SUN HUNG
The main advantage of trading using opposite Apple and SUN HUNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, SUN HUNG 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 SUN HUNG will offset losses from the drop in SUN HUNG's long position.| Apple vs. PLAYSTUDIOS A DL 0001 | Apple vs. COLUMBIA SPORTSWEAR | Apple vs. LG Display Co | Apple vs. Aedas Homes SA |
| SUN HUNG vs. OAKTRSPECLENDNEW | SUN HUNG vs. PT Bank Maybank | SUN HUNG vs. Mizuho Financial Group | SUN HUNG vs. Hyrican Informationssysteme Aktiengesellschaft |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |