Correlation Between InPlay Oil and Apple
Can any of the company-specific risk be diversified away by investing in both InPlay Oil 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 InPlay Oil and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InPlay Oil Corp and Apple Inc CDR, you can compare the effects of market volatilities on InPlay Oil 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 InPlay Oil with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and Apple.
Diversification Opportunities for InPlay Oil and Apple
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between InPlay and Apple is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and Apple Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc CDR and InPlay Oil 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 InPlay Oil Corp 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 CDR has no effect on the direction of InPlay Oil i.e., InPlay Oil and Apple go up and down completely randomly.
Pair Corralation between InPlay Oil and Apple
Assuming the 90 days trading horizon InPlay Oil Corp is expected to generate 1.37 times more return on investment than Apple. However, InPlay Oil is 1.37 times more volatile than Apple Inc CDR. It trades about 0.15 of its potential returns per unit of risk. Apple Inc CDR is currently generating about -0.42 per unit of risk. If you would invest 160.00 in InPlay Oil Corp on October 24, 2024 and sell it today you would earn a total of 10.00 from holding InPlay Oil Corp or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InPlay Oil Corp vs. Apple Inc CDR
Performance |
| Timeline |
| InPlay Oil Corp |
| Apple Inc CDR |
InPlay Oil and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and Apple
The main advantage of trading using opposite InPlay Oil and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil 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.| InPlay Oil vs. Gear Energy | InPlay Oil vs. Journey Energy | InPlay Oil vs. Yangarra Resources | InPlay Oil vs. Obsidian Energy |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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