Correlation Between INDO-RAMA SYNTHETIC and Apple

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

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

Diversification Opportunities for INDO-RAMA SYNTHETIC and Apple

0.0

Correlation Coefficient

INDO-RAMA SYNTHETIC  Apple

Pay attention - limited upside

The 3 months correlation between INDO-RAMA and Apple is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding INDO RAMA SYNTHETIC and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and INDO-RAMA SYNTHETIC 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 INDO RAMA SYNTHETIC 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 INDO-RAMA SYNTHETIC i.e., INDO-RAMA SYNTHETIC and Apple go up and down completely randomly.

Pair Corralation between INDO-RAMA SYNTHETIC and Apple

Assuming the 90 days trading horizon INDO RAMA SYNTHETIC is expected to under-perform the Apple. In addition to that, INDO-RAMA SYNTHETIC is 2.08 times more volatile than Apple Inc. It trades about 0.0 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.07 per unit of volatility. If you would invest  14,249  in Apple Inc on December 5, 2024 and sell it today you would earn a total of  8,416  from holding Apple Inc or generate 59.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

INDO RAMA SYNTHETIC  vs.  Apple Inc

INDO RAMA SYNTHETIC

Risk-Adjusted Performance

Very Weak

Over the last 90 days INDO RAMA SYNTHETIC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, INDO-RAMA SYNTHETIC is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the 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. Despite somewhat strong fundamental indicators, Apple is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with INDO-RAMA SYNTHETIC and Apple

The main advantage of trading using opposite INDO-RAMA SYNTHETIC and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDO-RAMA SYNTHETIC 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 INDO RAMA SYNTHETIC 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.