Correlation Between Apple and Atco Mining

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

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

Diversification Opportunities for Apple and Atco Mining

-0.4

Correlation Coefficient

Apple  Atco Mining

Very good diversification

The 3 months correlation between Apple and Atco is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Atco Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atco Mining 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 Atco Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atco Mining has no effect on the direction of Apple i.e., Apple and Atco Mining go up and down completely randomly.

Pair Corralation between Apple and Atco Mining

Given the investment horizon of 90 days Apple Inc is expected to under-perform the Atco Mining. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 13.68 times less risky than Atco Mining. The stock trades about 0.0 of its potential returns per unit of risk. The Atco Mining is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1.15  in Atco Mining on December 2, 2024 and sell it today you would lose (0.02) from holding Atco Mining or give up 1.74% of portfolio value over 90 days.

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

Apple Inc  vs.  Atco Mining

Apple Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Apple is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Atco Mining

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atco Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, Atco Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and Atco Mining

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

The idea behind Apple Inc and Atco Mining 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.