Correlation Between Alliance Data and Apple
Can any of the company-specific risk be diversified away by investing in both Alliance Data 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 Alliance Data and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Data Systems and Apple Inc, you can compare the effects of market volatilities on Alliance Data 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 Alliance Data with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Data and Apple.
Diversification Opportunities for Alliance Data and Apple
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alliance and Apple is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Data Systems and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Alliance Data 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 Alliance Data Systems 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 Alliance Data i.e., Alliance Data and Apple go up and down completely randomly.
Pair Corralation between Alliance Data and Apple
Assuming the 90 days trading horizon Alliance Data Systems is expected to under-perform the Apple. In addition to that, Alliance Data is 1.94 times more volatile than Apple Inc. It trades about -0.21 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.04 per unit of volatility. If you would invest 23,360 in Apple Inc on October 10, 2024 and sell it today you would earn a total of 125.00 from holding Apple Inc or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliance Data Systems vs. Apple Inc
Performance |
| Timeline |
| Alliance Data Systems |
| Apple Inc |
Alliance Data and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Data and Apple
The main advantage of trading using opposite Alliance Data and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Data 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.| Alliance Data vs. Gladstone Investment | Alliance Data vs. WisdomTree Investments | Alliance Data vs. Mitsui Chemicals | Alliance Data vs. SLR Investment Corp |
| Apple vs. CVR Medical Corp | Apple vs. Western Copper and | Apple vs. GLOBUS MEDICAL A | Apple vs. SPECTRAL MEDICAL |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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