Correlation Between NeuPath Health and Apple
Can any of the company-specific risk be diversified away by investing in both NeuPath Health 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 NeuPath Health and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NeuPath Health and Apple Inc CDR, you can compare the effects of market volatilities on NeuPath Health 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 NeuPath Health with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeuPath Health and Apple.
Diversification Opportunities for NeuPath Health and Apple
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NeuPath and Apple is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding NeuPath Health 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 NeuPath Health 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 NeuPath Health 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 NeuPath Health i.e., NeuPath Health and Apple go up and down completely randomly.
Pair Corralation between NeuPath Health and Apple
Assuming the 90 days trading horizon NeuPath Health is expected to generate 2.5 times more return on investment than Apple. However, NeuPath Health is 2.5 times more volatile than Apple Inc CDR. It trades about 0.14 of its potential returns per unit of risk. Apple Inc CDR is currently generating about -0.38 per unit of risk. If you would invest 20.00 in NeuPath Health on October 29, 2024 and sell it today you would earn a total of 2.00 from holding NeuPath Health or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NeuPath Health vs. Apple Inc CDR
Performance |
| Timeline |
| NeuPath Health |
| Apple Inc CDR |
NeuPath Health and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeuPath Health and Apple
The main advantage of trading using opposite NeuPath Health and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeuPath Health 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.| NeuPath Health vs. Stampede Drilling | NeuPath Health vs. Rogers Communications | NeuPath Health vs. Data Communications Management | NeuPath Health vs. Advent Wireless |
| Apple vs. Sun Peak Metals | Apple vs. Cogeco Communications | Apple vs. Advent Wireless | Apple vs. North American Financial |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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