Correlation Between Apple and Garovaglio

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

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

Diversification Opportunities for Apple and Garovaglio

0.2

Correlation Coefficient

Apple  Garovaglio

Modest diversification

The 3 months correlation between Apple and Garovaglio is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc DRC and Garovaglio y Zorraquin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garovaglio y Zorraquin and Apple 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 Apple Inc DRC are associated (or correlated) with Garovaglio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garovaglio y Zorraquin has no effect on the direction of Apple i.e., Apple and Garovaglio go up and down completely randomly.

Pair Corralation between Apple and Garovaglio

Assuming the 90 days trading horizon Apple is expected to generate 9.48 times less return on investment than Garovaglio. But when comparing it to its historical volatility, Apple Inc DRC is 2.79 times less risky than Garovaglio. It trades about 0.01 of its potential returns per unit of risk. Garovaglio y Zorraquin is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  20,350  in Garovaglio y Zorraquin on December 31, 2024 and sell it today you would earn a total of  0.00  from holding Garovaglio y Zorraquin or generate 0.0% return on investment over 90 days.

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

Apple Inc DRC  vs.  Garovaglio y Zorraquin

Apple Inc DRC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc DRC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Apple is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Garovaglio y Zorraquin

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Garovaglio y Zorraquin are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Garovaglio may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Apple and Garovaglio

The main advantage of trading using opposite Apple and Garovaglio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Garovaglio 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 Garovaglio will offset losses from the drop in Garovaglio's long position.

The idea behind Apple Inc DRC and Garovaglio y Zorraquin 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.