Correlation Between Central Asia and Apple
Can any of the company-specific risk be diversified away by investing in both Central Asia 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 Central Asia and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Asia Metals and Apple Inc, you can compare the effects of market volatilities on Central Asia 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 Central Asia with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Asia and Apple.
Diversification Opportunities for Central Asia and Apple
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Central and Apple is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Central Asia Metals and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Central Asia 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 Central Asia Metals 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 Central Asia i.e., Central Asia and Apple go up and down completely randomly.
Pair Corralation between Central Asia and Apple
Assuming the 90 days trading horizon Central Asia Metals is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, Central Asia Metals is 1.18 times less risky than Apple. The stock trades about -0.01 of its potential returns per unit of risk. The Apple Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 14,304 in Apple Inc on August 30, 2024 and sell it today you would earn a total of 8,996 from holding Apple Inc or generate 62.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Asia Metals vs. Apple Inc
Performance |
| Timeline |
| Central Asia Metals |
| Apple Inc |
Central Asia and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Asia and Apple
The main advantage of trading using opposite Central Asia and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Asia 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.| Central Asia vs. bet at home AG | Central Asia vs. Pets at Home | Central Asia vs. LBG Media PLC | Central Asia vs. Advanced Medical Solutions |
| Apple vs. Scandinavian Tobacco Group | Apple vs. Mid Wynd International | Apple vs. Tyson Foods Cl | Apple vs. The Investment |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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