Correlation Between Apple and GigCapital5

Can any of the company-specific risk be diversified away by investing in both Apple and GigCapital5 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 GigCapital5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apple Inc and GigCapital5, you can compare the effects of market volatilities on Apple and GigCapital5 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 GigCapital5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and GigCapital5.

Diversification Opportunities for Apple and GigCapital5

-0.61

Correlation Coefficient

Apple  GigCapital5

Excellent diversification

The 3 months correlation between Apple and GigCapital5 is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and GigCapital5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigCapital5 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 GigCapital5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigCapital5 has no effect on the direction of Apple i.e., Apple and GigCapital5 go up and down completely randomly.

Pair Corralation between Apple and GigCapital5

If you would invest  21,608  in Apple Inc on September 16, 2024 and sell it today you would earn a total of  3,205  from holding Apple Inc or generate 14.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.54%
Values	Daily Returns

Apple Inc  vs.  GigCapital5

Apple Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Apple disclosed solid returns over the last few months and may actually be approaching a breakup point.

GigCapital5

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GigCapital5 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, GigCapital5 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 GigCapital5

The main advantage of trading using opposite Apple and GigCapital5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, GigCapital5 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 GigCapital5 will offset losses from the drop in GigCapital5's long position.

The idea behind Apple Inc and GigCapital5 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.