Correlation Between APPLE and American Axle
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By analyzing existing cross correlation between APPLE INC and American Axle Manufacturing, you can compare the effects of market volatilities on APPLE and American Axle 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 APPLE with a short position of American Axle. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLE and American Axle.
Diversification Opportunities for APPLE and American Axle
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between APPLE and American is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding APPLE INC and American Axle Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Axle Manufa and APPLE 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 APPLE INC are associated (or correlated) with American Axle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Axle Manufa has no effect on the direction of APPLE i.e., APPLE and American Axle go up and down completely randomly.
Pair Corralation between APPLE and American Axle
Assuming the 90 days trading horizon APPLE INC is expected to under-perform the American Axle. But the bond apears to be less risky and, when comparing its historical volatility, APPLE INC is 2.13 times less risky than American Axle. The bond trades about -0.07 of its potential returns per unit of risk. The American Axle Manufacturing is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 610.00 in American Axle Manufacturing on September 3, 2024 and sell it today you would earn a total of 51.00 from holding American Axle Manufacturing or generate 8.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 92.86% |
| Values | Daily Returns |
APPLE INC vs. American Axle Manufacturing
Performance |
| Timeline |
| APPLE INC |
| American Axle Manufa |
APPLE and American Axle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APPLE and American Axle
The main advantage of trading using opposite APPLE and American Axle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APPLE position performs unexpectedly, American Axle 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 American Axle will offset losses from the drop in American Axle's long position.The idea behind APPLE INC and American Axle Manufacturing 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.| American Axle vs. Allison Transmission Holdings | American Axle vs. Aptiv PLC | American Axle vs. LKQ Corporation | American Axle vs. Lear Corporation |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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