Correlation Between RTL Group and Apple
Can any of the company-specific risk be diversified away by investing in both RTL Group 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 RTL Group and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RTL Group SA and Apple Inc, you can compare the effects of market volatilities on RTL Group 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 RTL Group with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTL Group and Apple.
Diversification Opportunities for RTL Group and Apple
Pay attention - limited upside
The 3 months correlation between RTL and Apple is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RTL Group SA and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and RTL Group 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 RTL Group SA 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 RTL Group i.e., RTL Group and Apple go up and down completely randomly.
Pair Corralation between RTL Group and Apple
Assuming the 90 days horizon RTL Group is expected to generate 3.46 times less return on investment than Apple. But when comparing it to its historical volatility, RTL Group SA is 2.99 times less risky than Apple. It trades about 0.07 of its potential returns per unit of risk. Apple Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 14,396 in Apple Inc on September 3, 2024 and sell it today you would earn a total of 9,337 from holding Apple Inc or generate 64.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
RTL Group SA vs. Apple Inc
Performance |
| Timeline |
| RTL Group SA |
| Apple Inc |
RTL Group and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTL Group and Apple
The main advantage of trading using opposite RTL Group and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTL Group 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.| RTL Group vs. Apple Inc | RTL Group vs. Microsoft | RTL Group vs. Amazon Inc | RTL Group vs. Alphabet Inc Class C |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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