Correlation Between TRADEGATE and Apple
Can any of the company-specific risk be diversified away by investing in both TRADEGATE 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 TRADEGATE and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEGATE and Apple Inc, you can compare the effects of market volatilities on TRADEGATE 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 TRADEGATE with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEGATE and Apple.
Diversification Opportunities for TRADEGATE and Apple
Modest diversification
The 3 months correlation between TRADEGATE and Apple is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding TRADEGATE and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and TRADEGATE 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 TRADEGATE 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 TRADEGATE i.e., TRADEGATE and Apple go up and down completely randomly.
Pair Corralation between TRADEGATE and Apple
Assuming the 90 days trading horizon TRADEGATE is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, TRADEGATE is 7.5 times less risky than Apple. The stock trades about -0.21 of its potential returns per unit of risk. The Apple Inc is currently generating about 0.61 of returns per unit of risk over similar time horizon. If you would invest 21,135 in Apple Inc on September 13, 2024 and sell it today you would earn a total of 2,640 from holding Apple Inc or generate 12.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRADEGATE vs. Apple Inc
Performance |
| Timeline |
| TRADEGATE |
| Apple Inc |
TRADEGATE and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEGATE and Apple
The main advantage of trading using opposite TRADEGATE and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEGATE 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.The idea behind TRADEGATE and Apple Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Apple vs. Perma Fix Environmental Services | Apple vs. MITSUBISHI STEEL MFG | Apple vs. ALGOMA STEEL GROUP | Apple vs. Aegean Airlines SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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