Correlation Between SCANDINAV REAL and Apple

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

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

Diversification Opportunities for SCANDINAV REAL and Apple

-0.91

Correlation Coefficient

SCANDINAV REAL  Apple

Pay attention - limited upside

The 3 months correlation between SCANDINAV and Apple is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding SCANDINAV REAL HEART and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and SCANDINAV REAL 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 SCANDINAV REAL HEART 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 SCANDINAV REAL i.e., SCANDINAV REAL and Apple go up and down completely randomly.

Pair Corralation between SCANDINAV REAL and Apple

Assuming the 90 days horizon SCANDINAV REAL HEART is expected to generate 54.99 times more return on investment than Apple. However, SCANDINAV REAL is 54.99 times more volatile than Apple Inc. It trades about 0.07 of its potential returns per unit of risk. Apple Inc is currently generating about 0.1 per unit of risk. If you would invest  1,127  in SCANDINAV REAL HEART on October 6, 2024 and sell it today you would lose (1,031) from holding SCANDINAV REAL HEART or give up 91.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.01%
Values	Daily Returns

SCANDINAV REAL HEART  vs.  Apple Inc

SCANDINAV REAL HEART

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCANDINAV REAL HEART 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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Apple Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SCANDINAV REAL and Apple

The main advantage of trading using opposite SCANDINAV REAL and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANDINAV REAL 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 SCANDINAV REAL HEART 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.