Correlation Between Apple and ABS CBN

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

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

Diversification Opportunities for Apple and ABS CBN

0.0

Correlation Coefficient

Apple  ABS CBN

Pay attention - limited upside

The 3 months correlation between Apple and ABS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ABS CBN Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABS CBN Holdings 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 are associated (or correlated) with ABS CBN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABS CBN Holdings has no effect on the direction of Apple i.e., Apple and ABS CBN go up and down completely randomly.

Pair Corralation between Apple and ABS CBN

If you would invest  22,875  in Apple Inc on November 20, 2024 and sell it today you would earn a total of  1,585  from holding Apple Inc or generate 6.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Apple Inc  vs.  ABS CBN Holdings

Apple Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in March 2025.

ABS CBN Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days ABS CBN Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ABS CBN is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Apple and ABS CBN

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

The idea behind Apple Inc and ABS CBN Holdings 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.