Correlation Between Apple and 00108WAP5

Can any of the company-specific risk be diversified away by investing in both Apple and 00108WAP5 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 00108WAP5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apple Inc and AEP 47 15 MAY 32, you can compare the effects of market volatilities on Apple and 00108WAP5 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 00108WAP5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and 00108WAP5.

Diversification Opportunities for Apple and 00108WAP5

-0.67

Correlation Coefficient

Apple  00108WAP5

Excellent diversification

The 3 months correlation between Apple and 00108WAP5 is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and AEP 47 15 MAY 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEP 47 15 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 00108WAP5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEP 47 15 has no effect on the direction of Apple i.e., Apple and 00108WAP5 go up and down completely randomly.

Pair Corralation between Apple and 00108WAP5

Given the investment horizon of 90 days Apple Inc is expected to generate 2.13 times more return on investment than 00108WAP5. However, Apple is 2.13 times more volatile than AEP 47 15 MAY 32. It trades about 0.09 of its potential returns per unit of risk. AEP 47 15 MAY 32 is currently generating about -0.01 per unit of risk. If you would invest  13,644  in Apple Inc on October 11, 2024 and sell it today you would earn a total of  10,626  from holding Apple Inc or generate 77.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	91.52%
Values	Daily Returns

Apple Inc  vs.  AEP 47 15 MAY 32

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.

AEP 47 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEP 47 15 MAY 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 00108WAP5 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Apple and 00108WAP5

The main advantage of trading using opposite Apple and 00108WAP5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, 00108WAP5 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 00108WAP5 will offset losses from the drop in 00108WAP5's long position.

The idea behind Apple Inc and AEP 47 15 MAY 32 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.