Correlation Between Scottish Mortgage and Apple

Can any of the company-specific risk be diversified away by investing in both Scottish Mortgage 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 Scottish Mortgage and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Scottish Mortgage Investment and Apple Inc, you can compare the effects of market volatilities on Scottish Mortgage 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 Scottish Mortgage with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish Mortgage and Apple.

Diversification Opportunities for Scottish Mortgage and Apple

0.23

Correlation Coefficient

Scottish Mortgage  Apple

Modest diversification

The 3 months correlation between Scottish and Apple is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Scottish Mortgage Investment and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Scottish Mortgage 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 Scottish Mortgage Investment 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 Scottish Mortgage i.e., Scottish Mortgage and Apple go up and down completely randomly.

Pair Corralation between Scottish Mortgage and Apple

Assuming the 90 days trading horizon Scottish Mortgage Investment is expected to generate 0.98 times more return on investment than Apple. However, Scottish Mortgage Investment is 1.02 times less risky than Apple. It trades about 0.03 of its potential returns per unit of risk. Apple Inc is currently generating about -0.18 per unit of risk. If you would invest  1,141  in Scottish Mortgage Investment on December 23, 2024 and sell it today you would earn a total of  26.00  from holding Scottish Mortgage Investment or generate 2.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Scottish Mortgage Investment  vs.  Apple Inc

Scottish Mortgage

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Scottish Mortgage Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Scottish Mortgage is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Scottish Mortgage and Apple

The main advantage of trading using opposite Scottish Mortgage and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottish Mortgage 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 Scottish Mortgage Investment 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..