Correlation Between MBANK and Apple
Can any of the company-specific risk be diversified away by investing in both MBANK and Apple 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 MBANK and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MBANK and Apple Inc, you can compare the effects of market volatilities on MBANK and Apple 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 MBANK with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBANK and Apple.
Diversification Opportunities for MBANK and Apple
Excellent diversification
The 3 months correlation between MBANK and Apple is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding MBANK and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and MBANK 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 MBANK are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of MBANK i.e., MBANK and Apple go up and down completely randomly.
Pair Corralation between MBANK and Apple
Assuming the 90 days trading horizon MBANK is expected to generate 1.97 times more return on investment than Apple. However, MBANK is 1.97 times more volatile than Apple Inc. It trades about 0.07 of its potential returns per unit of risk. Apple Inc is currently generating about 0.1 per unit of risk. If you would invest 6,000 in MBANK on September 14, 2024 and sell it today you would earn a total of 6,520 from holding MBANK or generate 108.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MBANK vs. Apple Inc
Performance |
| Timeline |
| MBANK |
| Apple Inc |
MBANK and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBANK and Apple
The main advantage of trading using opposite MBANK and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBANK position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.The idea behind MBANK and Apple Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Apple vs. Spirent Communications plc | Apple vs. Evolution Mining Limited | Apple vs. CHINA TELECOM H | Apple vs. Harmony Gold Mining |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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