Correlation Between SCOTT TECHNOLOGY and Apple
Can any of the company-specific risk be diversified away by investing in both SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOTT TECHNOLOGY and Apple Inc, you can compare the effects of market volatilities on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOTT TECHNOLOGY and Apple.
Diversification Opportunities for SCOTT TECHNOLOGY and Apple
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCOTT and Apple is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SCOTT TECHNOLOGY and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY i.e., SCOTT TECHNOLOGY and Apple go up and down completely randomly.
Pair Corralation between SCOTT TECHNOLOGY and Apple
Assuming the 90 days trading horizon SCOTT TECHNOLOGY is expected to generate 1.78 times more return on investment than Apple. However, SCOTT TECHNOLOGY is 1.78 times more volatile than Apple Inc. It trades about 0.08 of its potential returns per unit of risk. Apple Inc is currently generating about -0.16 per unit of risk. If you would invest 122.00 in SCOTT TECHNOLOGY on October 17, 2024 and sell it today you would earn a total of 3.00 from holding SCOTT TECHNOLOGY or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOTT TECHNOLOGY vs. Apple Inc
Performance |
| Timeline |
| SCOTT TECHNOLOGY |
| Apple Inc |
SCOTT TECHNOLOGY and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOTT TECHNOLOGY and Apple
The main advantage of trading using opposite SCOTT TECHNOLOGY and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOTT TECHNOLOGY 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.| SCOTT TECHNOLOGY vs. AGRICULTBK HADR25 YC | SCOTT TECHNOLOGY vs. MAVEN WIRELESS SWEDEN | SCOTT TECHNOLOGY vs. Dairy Farm International | SCOTT TECHNOLOGY vs. FARM 51 GROUP |
| Apple vs. SCOTT TECHNOLOGY | Apple vs. InterContinental Hotels Group | Apple vs. COVIVIO HOTELS INH | Apple vs. Pebblebrook Hotel Trust |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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