Correlation Between Apple and CONOCOPHILLIPS (YCPSG)
Can any of the company-specific risk be diversified away by investing in both Apple and CONOCOPHILLIPS (YCPSG) 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 CONOCOPHILLIPS (YCPSG) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and CONOCOPHILLIPS, you can compare the effects of market volatilities on Apple and CONOCOPHILLIPS (YCPSG) 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 CONOCOPHILLIPS (YCPSG). Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and CONOCOPHILLIPS (YCPSG).
Diversification Opportunities for Apple and CONOCOPHILLIPS (YCPSG)
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and CONOCOPHILLIPS is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and CONOCOPHILLIPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONOCOPHILLIPS (YCPSG) 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 CONOCOPHILLIPS (YCPSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONOCOPHILLIPS (YCPSG) has no effect on the direction of Apple i.e., Apple and CONOCOPHILLIPS (YCPSG) go up and down completely randomly.
Pair Corralation between Apple and CONOCOPHILLIPS (YCPSG)
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.85 times more return on investment than CONOCOPHILLIPS (YCPSG). However, Apple Inc is 1.17 times less risky than CONOCOPHILLIPS (YCPSG). It trades about 0.06 of its potential returns per unit of risk. CONOCOPHILLIPS is currently generating about 0.03 per unit of risk. If you would invest 16,620 in Apple Inc on August 31, 2024 and sell it today you would earn a total of 5,815 from holding Apple Inc or generate 34.99% 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. CONOCOPHILLIPS
Performance |
| Timeline |
| Apple Inc |
| CONOCOPHILLIPS (YCPSG) |
Apple and CONOCOPHILLIPS (YCPSG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and CONOCOPHILLIPS (YCPSG)
The main advantage of trading using opposite Apple and CONOCOPHILLIPS (YCPSG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, CONOCOPHILLIPS (YCPSG) 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 CONOCOPHILLIPS (YCPSG) will offset losses from the drop in CONOCOPHILLIPS (YCPSG)'s long position.| Apple vs. X Fab Silicon | Apple vs. UPDATE SOFTWARE | Apple vs. ATOSS SOFTWARE | Apple vs. Alfa Financial Software |
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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 Stocks Directory module to find actively traded stocks across global markets.
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