Correlation Between Apple and Gamehost

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

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

Diversification Opportunities for Apple and Gamehost

-0.63

Correlation Coefficient

Apple  Gamehost

Excellent diversification

The 3 months correlation between Apple and Gamehost is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Gamehost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamehost 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 Gamehost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamehost has no effect on the direction of Apple i.e., Apple and Gamehost go up and down completely randomly.

Pair Corralation between Apple and Gamehost

Given the investment horizon of 90 days Apple is expected to generate 1.34 times less return on investment than Gamehost. But when comparing it to its historical volatility, Apple Inc is 2.19 times less risky than Gamehost. It trades about 0.07 of its potential returns per unit of risk. Gamehost is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  553.00  in Gamehost on October 24, 2024 and sell it today you would earn a total of  160.00  from holding Gamehost or generate 28.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	67.0%
Values	Daily Returns

Apple Inc  vs.  Gamehost

Apple Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Gamehost

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamehost has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Apple and Gamehost

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

The idea behind Apple Inc and Gamehost 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..