Correlation Between Apple and Lifco AB

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

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

Diversification Opportunities for Apple and Lifco AB

0.04

Correlation Coefficient

Apple  Lifco AB

Significant diversification

The 3 months correlation between Apple and Lifco is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Lifco AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifco AB 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 Lifco AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifco AB has no effect on the direction of Apple i.e., Apple and Lifco AB go up and down completely randomly.

Pair Corralation between Apple and Lifco AB

Given the investment horizon of 90 days Apple is expected to generate 2.52 times less return on investment than Lifco AB. But when comparing it to its historical volatility, Apple Inc is 2.91 times less risky than Lifco AB. It trades about 0.09 of its potential returns per unit of risk. Lifco AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  854.00  in Lifco AB on October 12, 2024 and sell it today you would earn a total of  805.00  from holding Lifco AB or generate 94.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	58.59%
Values	Daily Returns

Apple Inc  vs.  Lifco AB

Apple Inc

Risk-Adjusted Performance

6 of 100

OK

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 persistent basic indicators, Apple is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Lifco AB

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lifco AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Lifco AB may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Apple and Lifco AB

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

The idea behind Apple Inc and Lifco AB 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 CEOs Directory module to screen CEOs from public companies around the world.