Correlation Between Apple and Nexus Gold

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

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

Diversification Opportunities for Apple and Nexus Gold

-0.55

Correlation Coefficient

Apple  Nexus Gold

Excellent diversification

The 3 months correlation between Apple and Nexus is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Nexus Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexus Gold Corp 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 Nexus Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexus Gold Corp has no effect on the direction of Apple i.e., Apple and Nexus Gold go up and down completely randomly.

Pair Corralation between Apple and Nexus Gold

If you would invest  22,320  in Apple Inc on October 6, 2024 and sell it today you would earn a total of  2,016  from holding Apple Inc or generate 9.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	2.44%
Values	Daily Returns

Apple Inc  vs.  Nexus Gold Corp

Apple Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Nexus Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexus Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Nexus Gold is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Apple and Nexus Gold

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

The idea behind Apple Inc and Nexus Gold Corp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.