Correlation Between WPP PLC and APPLE
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By analyzing existing cross correlation between WPP PLC ADR and APPLE INC 335, you can compare the effects of market volatilities on WPP PLC 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 WPP PLC with a short position of APPLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WPP PLC and APPLE.
Diversification Opportunities for WPP PLC and APPLE
Very good diversification
The 3 months correlation between WPP and APPLE is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding WPP PLC ADR and APPLE INC 335 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLE INC 335 and WPP PLC 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 WPP PLC ADR 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 335 has no effect on the direction of WPP PLC i.e., WPP PLC and APPLE go up and down completely randomly.
Pair Corralation between WPP PLC and APPLE
Considering the 90-day investment horizon WPP PLC ADR is expected to generate 5.85 times more return on investment than APPLE. However, WPP PLC is 5.85 times more volatile than APPLE INC 335. It trades about 0.17 of its potential returns per unit of risk. APPLE INC 335 is currently generating about -0.15 per unit of risk. If you would invest 4,561 in WPP PLC ADR on August 31, 2024 and sell it today you would earn a total of 810.00 from holding WPP PLC ADR or generate 17.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
WPP PLC ADR vs. APPLE INC 335
Performance |
| Timeline |
| WPP PLC ADR |
| APPLE INC 335 |
WPP PLC and APPLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WPP PLC and APPLE
The main advantage of trading using opposite WPP PLC and APPLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WPP PLC 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 WPP PLC ADR and APPLE INC 335 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. Grocery Outlet Holding | APPLE vs. Siriuspoint | APPLE vs. Sun Life Financial | APPLE vs. QBE Insurance Group |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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