Correlation Between Restaurant Brands and Apple
Can any of the company-specific risk be diversified away by investing in both Restaurant Brands 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 Restaurant Brands and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Restaurant Brands International and Apple Inc CDR, you can compare the effects of market volatilities on Restaurant Brands 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 Restaurant Brands with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Restaurant Brands and Apple.
Diversification Opportunities for Restaurant Brands and Apple
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Restaurant and Apple is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Restaurant Brands Internationa 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 Restaurant Brands 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 Restaurant Brands International 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 Restaurant Brands i.e., Restaurant Brands and Apple go up and down completely randomly.
Pair Corralation between Restaurant Brands and Apple
Assuming the 90 days trading horizon Restaurant Brands is expected to generate 3.44 times less return on investment than Apple. But when comparing it to its historical volatility, Restaurant Brands International is 1.18 times less risky than Apple. It trades about 0.03 of its potential returns per unit of risk. Apple Inc CDR is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,973 in Apple Inc CDR on September 12, 2024 and sell it today you would earn a total of 1,657 from holding Apple Inc CDR or generate 83.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Restaurant Brands Internationa vs. Apple Inc CDR
Performance |
| Timeline |
| Restaurant Brands |
| Apple Inc CDR |
Restaurant Brands and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Restaurant Brands and Apple
The main advantage of trading using opposite Restaurant Brands and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Restaurant Brands 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.| Restaurant Brands vs. Apple Inc CDR | Restaurant Brands vs. NVIDIA CDR | Restaurant Brands vs. Microsoft Corp CDR | Restaurant Brands vs. Amazon CDR |
| Apple vs. Doman Building Materials | Apple vs. Identillect Technologies Corp | Apple vs. NeXGold Mining Corp | Apple vs. Oculus VisionTech |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |