Correlation Between Apple and Vossloh AG
Can any of the company-specific risk be diversified away by investing in both Apple and Vossloh AG 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 Vossloh AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Vossloh AG, you can compare the effects of market volatilities on Apple and Vossloh AG 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 Vossloh AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Vossloh AG.
Diversification Opportunities for Apple and Vossloh AG
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and Vossloh is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Vossloh AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vossloh AG 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 Vossloh AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vossloh AG has no effect on the direction of Apple i.e., Apple and Vossloh AG go up and down completely randomly.
Pair Corralation between Apple and Vossloh AG
Assuming the 90 days trading horizon Apple Inc is expected to generate 1.12 times more return on investment than Vossloh AG. However, Apple is 1.12 times more volatile than Vossloh AG. It trades about 0.08 of its potential returns per unit of risk. Vossloh AG is currently generating about 0.02 per unit of risk. If you would invest 13,267 in Apple Inc on September 4, 2024 and sell it today you would earn a total of 9,543 from holding Apple Inc or generate 71.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Apple Inc vs. Vossloh AG
Performance |
| Timeline |
| Apple Inc |
| Vossloh AG |
Apple and Vossloh AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Vossloh AG
The main advantage of trading using opposite Apple and Vossloh AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Vossloh AG 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 Vossloh AG will offset losses from the drop in Vossloh AG's long position.| Apple vs. Chunghwa Telecom Co | Apple vs. Micron Technology | Apple vs. FANDIFI TECHNOLOGY P | Apple vs. Check Point Software |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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