Correlation Between KWESST MICRO and Apple

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

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

Diversification Opportunities for KWESST MICRO and Apple

0.36

Correlation Coefficient

KWESST MICRO  Apple

Weak diversification

The 3 months correlation between KWESST and Apple is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding KWESST MICRO SYSINC and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and KWESST MICRO 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 KWESST MICRO SYSINC 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 KWESST MICRO i.e., KWESST MICRO and Apple go up and down completely randomly.

Pair Corralation between KWESST MICRO and Apple

Assuming the 90 days trading horizon KWESST MICRO SYSINC is expected to under-perform the Apple. In addition to that, KWESST MICRO is 6.07 times more volatile than Apple Inc. It trades about -0.04 of its total potential returns per unit of risk. Apple Inc is currently generating about -0.11 per unit of volatility. If you would invest  23,690  in Apple Inc on December 11, 2024 and sell it today you would lose (2,785) from holding Apple Inc or give up 11.76% of portfolio value over 90 days.

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

KWESST MICRO SYSINC  vs.  Apple Inc

KWESST MICRO SYSINC

Risk-Adjusted Performance

Very Weak

Over the last 90 days KWESST MICRO SYSINC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company 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 latest fragile performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with KWESST MICRO and Apple

The main advantage of trading using opposite KWESST MICRO and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KWESST MICRO 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 KWESST MICRO SYSINC 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.