Correlation Between Apple and Vertex Resource

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

Diversification Opportunities for Apple and Vertex Resource

-0.22

Correlation Coefficient

Apple  Vertex Resource

Very good diversification

The 3 months correlation between Apple and Vertex is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Vertex Resource Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vertex Resource Group 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 Vertex Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vertex Resource Group has no effect on the direction of Apple i.e., Apple and Vertex Resource go up and down completely randomly.

Pair Corralation between Apple and Vertex Resource

Assuming the 90 days trading horizon Apple Inc CDR is expected to under-perform the Vertex Resource. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc CDR is 2.56 times less risky than Vertex Resource. The stock trades about -0.08 of its potential returns per unit of risk. The Vertex Resource Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  25.00  in Vertex Resource Group on December 11, 2024 and sell it today you would earn a total of  0.00  from holding Vertex Resource Group or generate 0.0% 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.  Vertex Resource Group

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 latest abnormal performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Vertex Resource Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vertex Resource Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Vertex Resource 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 Vertex Resource

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

The idea behind Apple Inc CDR and Vertex Resource Group 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.