Correlation Between FC Investment and Apple
Can any of the company-specific risk be diversified away by investing in both FC Investment 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 FC Investment and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FC Investment Trust and Apple Inc, you can compare the effects of market volatilities on FC Investment 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 FC Investment with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Apple.
Diversification Opportunities for FC Investment and Apple
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FCIT and Apple is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and FC Investment 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 FC Investment Trust 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 FC Investment i.e., FC Investment and Apple go up and down completely randomly.
Pair Corralation between FC Investment and Apple
Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.05 times more return on investment than Apple. However, FC Investment Trust is 18.81 times less risky than Apple. It trades about 0.19 of its potential returns per unit of risk. Apple Inc is currently generating about -0.06 per unit of risk. If you would invest 102,641 in FC Investment Trust on September 2, 2024 and sell it today you would earn a total of 9,559 from holding FC Investment Trust or generate 9.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FC Investment Trust vs. Apple Inc
Performance |
| Timeline |
| FC Investment Trust |
| Apple Inc |
FC Investment and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Apple
The main advantage of trading using opposite FC Investment and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment 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.| FC Investment vs. Toyota Motor Corp | FC Investment vs. SoftBank Group Corp | FC Investment vs. OTP Bank Nyrt | FC Investment vs. Las Vegas Sands |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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