Correlation Between Apple and BlackRock

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

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

Diversification Opportunities for Apple and BlackRock

0.58

Correlation Coefficient

Apple  BlackRock

Very weak diversification

The 3 months correlation between Apple and BlackRock is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and BlackRock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock 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 BlackRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock has no effect on the direction of Apple i.e., Apple and BlackRock go up and down completely randomly.

Pair Corralation between Apple and BlackRock

Given the investment horizon of 90 days Apple Inc is expected to generate 1.07 times more return on investment than BlackRock. However, Apple is 1.07 times more volatile than BlackRock. It trades about 0.08 of its potential returns per unit of risk. BlackRock is currently generating about 0.07 per unit of risk. If you would invest  15,248  in Apple Inc on October 5, 2024 and sell it today you would earn a total of  9,137  from holding Apple Inc or generate 59.92% return on investment over 90 days.

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

Apple Inc  vs.  BlackRock

Apple Inc

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BlackRock

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, BlackRock may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Apple and BlackRock

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

The idea behind Apple Inc and BlackRock 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.