Correlation Between Apple and Quisitive Technology

Can any of the company-specific risk be diversified away by investing in both Apple and Quisitive Technology 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 Quisitive Technology 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 Quisitive Technology Solutions, you can compare the effects of market volatilities on Apple and Quisitive Technology 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 Quisitive Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Quisitive Technology.

Diversification Opportunities for Apple and Quisitive Technology

0.06

Correlation Coefficient

Apple  Quisitive Technology

Significant diversification

The 3 months correlation between Apple and Quisitive is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Quisitive Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quisitive Technology 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 Quisitive Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quisitive Technology has no effect on the direction of Apple i.e., Apple and Quisitive Technology go up and down completely randomly.

Pair Corralation between Apple and Quisitive Technology

Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 0.4 times more return on investment than Quisitive Technology. However, Apple Inc CDR is 2.52 times less risky than Quisitive Technology. It trades about 0.14 of its potential returns per unit of risk. Quisitive Technology Solutions is currently generating about -0.01 per unit of risk. If you would invest  3,269  in Apple Inc CDR on September 13, 2024 and sell it today you would earn a total of  366.00  from holding Apple Inc CDR or generate 11.2% return on investment over 90 days.

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

Apple Inc CDR  vs.  Quisitive Technology Solutions

Apple Inc CDR

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc CDR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Quisitive Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quisitive Technology Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, Quisitive Technology is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Apple and Quisitive Technology

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

The idea behind Apple Inc CDR and Quisitive Technology Solutions 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.