Correlation Between NEW MILLENNIUM and Apple

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

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

Diversification Opportunities for NEW MILLENNIUM and Apple

0.44

Correlation Coefficient

NEW MILLENNIUM  Apple

Very weak diversification

The 3 months correlation between NEW and Apple is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding NEW MILLENNIUM IRON and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and NEW MILLENNIUM 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 NEW MILLENNIUM IRON 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 NEW MILLENNIUM i.e., NEW MILLENNIUM and Apple go up and down completely randomly.

Pair Corralation between NEW MILLENNIUM and Apple

Assuming the 90 days trading horizon NEW MILLENNIUM IRON is expected to generate 1.3 times more return on investment than Apple. However, NEW MILLENNIUM is 1.3 times more volatile than Apple Inc. It trades about -0.11 of its potential returns per unit of risk. Apple Inc is currently generating about -0.17 per unit of risk. If you would invest  735.00  in NEW MILLENNIUM IRON on December 20, 2024 and sell it today you would lose (110.00) from holding NEW MILLENNIUM IRON or give up 14.97% of portfolio value over 90 days.

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

NEW MILLENNIUM IRON  vs.  Apple Inc

NEW MILLENNIUM IRON

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEW MILLENNIUM IRON has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 uncertain 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 NEW MILLENNIUM and Apple

The main advantage of trading using opposite NEW MILLENNIUM and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW MILLENNIUM 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 NEW MILLENNIUM IRON 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.