Correlation Between Patria Investments and Apple
Can any of the company-specific risk be diversified away by investing in both Patria Investments 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 Patria Investments and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patria Investments Limited and Apple Inc, you can compare the effects of market volatilities on Patria Investments 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 Patria Investments with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patria Investments and Apple.
Diversification Opportunities for Patria Investments and Apple
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Patria and Apple is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Patria Investments Limited and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Patria Investments 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 Patria Investments Limited 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 Patria Investments i.e., Patria Investments and Apple go up and down completely randomly.
Pair Corralation between Patria Investments and Apple
Assuming the 90 days trading horizon Patria Investments Limited is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, Patria Investments Limited is 1.25 times less risky than Apple. The stock trades about -0.26 of its potential returns per unit of risk. The Apple Inc is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 7,515 in Apple Inc on October 14, 2024 and sell it today you would lose (313.00) from holding Apple Inc or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patria Investments Limited vs. Apple Inc
Performance |
| Timeline |
| Patria Investments |
| Apple Inc |
Patria Investments and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patria Investments and Apple
The main advantage of trading using opposite Patria Investments and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patria Investments 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.| Patria Investments vs. Taiwan Semiconductor Manufacturing | Patria Investments vs. Apple Inc | Patria Investments vs. Alibaba Group Holding | Patria Investments vs. Banco Santander Chile |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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