Correlation Between Journey Energy and Apple
Can any of the company-specific risk be diversified away by investing in both Journey Energy 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 Journey Energy and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Journey Energy and Apple Inc CDR, you can compare the effects of market volatilities on Journey Energy 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 Journey Energy with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Journey Energy and Apple.
Diversification Opportunities for Journey Energy and Apple
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Journey and Apple is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Journey Energy 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 Journey Energy 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 Journey Energy 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 Journey Energy i.e., Journey Energy and Apple go up and down completely randomly.
Pair Corralation between Journey Energy and Apple
Assuming the 90 days trading horizon Journey Energy is expected to generate 17.76 times less return on investment than Apple. In addition to that, Journey Energy is 2.97 times more volatile than Apple Inc CDR. It trades about 0.0 of its total potential returns per unit of risk. Apple Inc CDR is currently generating about 0.25 per unit of volatility. If you would invest 3,311 in Apple Inc CDR on September 1, 2024 and sell it today you would earn a total of 164.00 from holding Apple Inc CDR or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Journey Energy vs. Apple Inc CDR
Performance |
| Timeline |
| Journey Energy |
| Apple Inc CDR |
Journey Energy and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Journey Energy and Apple
The main advantage of trading using opposite Journey Energy and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Journey Energy 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 Journey Energy and Apple Inc CDR 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.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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