Correlation Between Apple and Spin Master

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

Diversification Opportunities for Apple and Spin Master

0.7

Correlation Coefficient

Apple  Spin Master

Poor diversification

The 3 months correlation between Apple and Spin is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Spin Master Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spin Master Corp 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 Spin Master. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spin Master Corp has no effect on the direction of Apple i.e., Apple and Spin Master go up and down completely randomly.

Pair Corralation between Apple and Spin Master

Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 0.98 times more return on investment than Spin Master. However, Apple Inc CDR is 1.03 times less risky than Spin Master. It trades about -0.13 of its potential returns per unit of risk. Spin Master Corp is currently generating about -0.26 per unit of risk. If you would invest  3,696  in Apple Inc CDR on December 29, 2024 and sell it today you would lose (527.00) from holding Apple Inc CDR or give up 14.26% of portfolio value over 90 days.

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

Apple Inc CDR  vs.  Spin Master Corp

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.

Spin Master Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spin Master Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Apple and Spin Master

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

The idea behind Apple Inc CDR and Spin Master Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.