Correlation Between INSURANCE AUST and Apple
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST 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 INSURANCE AUST and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSURANCE AUST GRP and Apple Inc, you can compare the effects of market volatilities on INSURANCE AUST 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 INSURANCE AUST with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and Apple.
Diversification Opportunities for INSURANCE AUST and Apple
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INSURANCE and Apple is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and INSURANCE AUST 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 INSURANCE AUST GRP 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 INSURANCE AUST i.e., INSURANCE AUST and Apple go up and down completely randomly.
Pair Corralation between INSURANCE AUST and Apple
Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to under-perform the Apple. In addition to that, INSURANCE AUST is 1.96 times more volatile than Apple Inc. It trades about -0.05 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 |
INSURANCE AUST GRP vs. Apple Inc
Performance |
| Timeline |
| INSURANCE AUST GRP |
| Apple Inc |
INSURANCE AUST and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and Apple
The main advantage of trading using opposite INSURANCE AUST and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST 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.| INSURANCE AUST vs. ALLFUNDS GROUP EO 0025 | INSURANCE AUST vs. Major Drilling Group | INSURANCE AUST vs. Apollo Investment Corp | INSURANCE AUST vs. QINGCI GAMES INC |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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