Correlation Between REGION GROUP and Apple
Can any of the company-specific risk be diversified away by investing in both REGION 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 REGION GROUP and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGION GROUP STAPLED and Apple Inc, you can compare the effects of market volatilities on REGION 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 REGION GROUP with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGION GROUP and Apple.
Diversification Opportunities for REGION GROUP and Apple
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between REGION and Apple is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding REGION GROUP STAPLED and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and REGION 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 REGION GROUP STAPLED 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 REGION GROUP i.e., REGION GROUP and Apple go up and down completely randomly.
Pair Corralation between REGION GROUP and Apple
Assuming the 90 days trading horizon REGION GROUP is expected to generate 3.63 times less return on investment than Apple. But when comparing it to its historical volatility, REGION GROUP STAPLED is 1.02 times less risky than Apple. It trades about 0.1 of its potential returns per unit of risk. Apple Inc is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 20,575 in Apple Inc on September 1, 2024 and sell it today you would earn a total of 1,860 from holding Apple Inc or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGION GROUP STAPLED vs. Apple Inc
Performance |
| Timeline |
| REGION GROUP STAPLED |
| Apple Inc |
REGION GROUP and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGION GROUP and Apple
The main advantage of trading using opposite REGION GROUP and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGION 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.| REGION GROUP vs. T Mobile | REGION GROUP vs. China Communications Services | REGION GROUP vs. Consolidated Communications Holdings | REGION GROUP vs. Shenandoah Telecommunications |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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