Correlation Between Westaim Corp and Apple
Can any of the company-specific risk be diversified away by investing in both Westaim Corp 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 Westaim Corp and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Westaim Corp and Apple Inc, you can compare the effects of market volatilities on Westaim Corp 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 Westaim Corp with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westaim Corp and Apple.
Diversification Opportunities for Westaim Corp and Apple
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westaim and Apple is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding The Westaim Corp and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Westaim Corp 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 The Westaim Corp 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 Westaim Corp i.e., Westaim Corp and Apple go up and down completely randomly.
Pair Corralation between Westaim Corp and Apple
Assuming the 90 days trading horizon The Westaim Corp is expected to generate 0.51 times more return on investment than Apple. However, The Westaim Corp is 1.96 times less risky than Apple. It trades about 0.05 of its potential returns per unit of risk. Apple Inc is currently generating about -0.02 per unit of risk. If you would invest 1,980 in The Westaim Corp on October 30, 2024 and sell it today you would earn a total of 24.00 from holding The Westaim Corp or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Westaim Corp vs. Apple Inc
Performance |
| Timeline |
| Westaim Corp |
| Apple Inc |
Westaim Corp and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westaim Corp and Apple
The main advantage of trading using opposite Westaim Corp and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westaim Corp 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.| Westaim Corp vs. Apple Inc | Westaim Corp vs. Apple Inc | Westaim Corp vs. Apple Inc | Westaim Corp vs. Apple Inc |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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