Correlation Between Apple and NuGene International

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

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

Diversification Opportunities for Apple and NuGene International

-0.62

Correlation Coefficient

Apple  NuGene International

Excellent diversification

The 3 months correlation between Apple and NuGene is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and NuGene International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuGene International 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 NuGene International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuGene International has no effect on the direction of Apple i.e., Apple and NuGene International go up and down completely randomly.

Pair Corralation between Apple and NuGene International

Given the investment horizon of 90 days Apple is expected to generate 1.7 times less return on investment than NuGene International. But when comparing it to its historical volatility, Apple Inc is 9.75 times less risky than NuGene International. It trades about 0.09 of its potential returns per unit of risk. NuGene International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  7.00  in NuGene International on October 11, 2024 and sell it today you would lose (6.50) from holding NuGene International or give up 92.86% of portfolio value over 90 days.

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

Apple Inc  vs.  NuGene International

Apple Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in February 2025.

NuGene International

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NuGene International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, NuGene International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and NuGene International

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

The idea behind Apple Inc and NuGene International 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.