Correlation Between TAMBANG BATUBARA-B- and Apple
Can any of the company-specific risk be diversified away by investing in both TAMBANG BATUBARA-B- 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 TAMBANG BATUBARA-B- and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAMBANG BATUBARA B and Apple Inc, you can compare the effects of market volatilities on TAMBANG BATUBARA-B- 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 TAMBANG BATUBARA-B- with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAMBANG BATUBARA-B- and Apple.
Diversification Opportunities for TAMBANG BATUBARA-B- and Apple
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TAMBANG and Apple is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding TAMBANG BATUBARA B and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and TAMBANG BATUBARA-B- 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 TAMBANG BATUBARA B 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 TAMBANG BATUBARA-B- i.e., TAMBANG BATUBARA-B- and Apple go up and down completely randomly.
Pair Corralation between TAMBANG BATUBARA-B- and Apple
Assuming the 90 days trading horizon TAMBANG BATUBARA B is expected to generate 3.75 times more return on investment than Apple. However, TAMBANG BATUBARA-B- is 3.75 times more volatile than Apple Inc. It trades about 0.07 of its potential returns per unit of risk. Apple Inc is currently generating about 0.19 per unit of risk. If you would invest 17.00 in TAMBANG BATUBARA B on August 31, 2024 and sell it today you would earn a total of 1.00 from holding TAMBANG BATUBARA B or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
TAMBANG BATUBARA B vs. Apple Inc
Performance |
| Timeline |
| TAMBANG BATUBARA-B- |
| Apple Inc |
TAMBANG BATUBARA-B- and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAMBANG BATUBARA-B- and Apple
The main advantage of trading using opposite TAMBANG BATUBARA-B- and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAMBANG BATUBARA-B- 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.| TAMBANG BATUBARA-B- vs. SIVERS SEMICONDUCTORS AB | TAMBANG BATUBARA-B- vs. Darden Restaurants | TAMBANG BATUBARA-B- vs. Reliance Steel Aluminum | TAMBANG BATUBARA-B- vs. Q2M Managementberatung AG |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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