Correlation Between Apple and Finning International

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

By analyzing existing cross correlation between Apple Inc CDR and Finning International, you can compare the effects of market volatilities on Apple and Finning International 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 Finning International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Finning International.

Diversification Opportunities for Apple and Finning International

-0.14

Correlation Coefficient

Apple  Finning International

Good diversification

The 3 months correlation between Apple and Finning is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Finning International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finning International 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 CDR are associated (or correlated) with Finning International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finning International has no effect on the direction of Apple i.e., Apple and Finning International go up and down completely randomly.

Pair Corralation between Apple and Finning International

Assuming the 90 days trading horizon Apple Inc CDR is expected to under-perform the Finning International. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc CDR is 1.37 times less risky than Finning International. The stock trades about -0.14 of its potential returns per unit of risk. The Finning International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,689  in Finning International on December 23, 2024 and sell it today you would earn a total of  309.00  from holding Finning International or generate 8.38% return on investment over 90 days.

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

Apple Inc CDR  vs.  Finning International

Apple Inc CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental 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.

Finning International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Finning International are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Finning International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Apple and Finning International

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

The idea behind Apple Inc CDR and Finning International 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .