Correlation Between Apple and Niagara Mohawk

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

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

Diversification Opportunities for Apple and Niagara Mohawk

-0.3

Correlation Coefficient

Apple  Niagara Mohawk

Very good diversification

The 3 months correlation between Apple and Niagara is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Niagara Mohawk Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niagara Mohawk Power 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 Niagara Mohawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niagara Mohawk Power has no effect on the direction of Apple i.e., Apple and Niagara Mohawk go up and down completely randomly.

Pair Corralation between Apple and Niagara Mohawk

Given the investment horizon of 90 days Apple Inc is expected to under-perform the Niagara Mohawk. In addition to that, Apple is 2.61 times more volatile than Niagara Mohawk Power. It trades about -0.12 of its total potential returns per unit of risk. Niagara Mohawk Power is currently generating about 0.07 per unit of volatility. If you would invest  5,750  in Niagara Mohawk Power on December 29, 2024 and sell it today you would earn a total of  150.00  from holding Niagara Mohawk Power or generate 2.61% return on investment over 90 days.

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

Apple Inc  vs.  Niagara Mohawk Power

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Niagara Mohawk Power

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Niagara Mohawk Power are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Niagara Mohawk is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Apple and Niagara Mohawk

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

The idea behind Apple Inc and Niagara Mohawk Power 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.