Correlation Between Apple and TELEFO

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

By analyzing existing cross correlation between Apple Inc and TELEFO 495 17 JUL 30, you can compare the effects of market volatilities on Apple and TELEFO 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 TELEFO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and TELEFO.

Diversification Opportunities for Apple and TELEFO

0.56

Correlation Coefficient

Apple  TELEFO

Very weak diversification

The 3 months correlation between Apple and TELEFO is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and TELEFO 495 17 JUL 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELEFO 495 17 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 TELEFO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELEFO 495 17 has no effect on the direction of Apple i.e., Apple and TELEFO go up and down completely randomly.

Pair Corralation between Apple and TELEFO

Given the investment horizon of 90 days Apple Inc is expected to under-perform the TELEFO. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 3.59 times less risky than TELEFO. The stock trades about -0.53 of its potential returns per unit of risk. The TELEFO 495 17 JUL 30 is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  8,415  in TELEFO 495 17 JUL 30 on October 27, 2024 and sell it today you would lose (200.00) from holding TELEFO 495 17 JUL 30 or give up 2.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	31.58%
Values	Daily Returns

Apple Inc  vs.  TELEFO 495 17 JUL 30

Apple Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Apple is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

TELEFO 495 17

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TELEFO 495 17 JUL 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for TELEFO 495 17 JUL 30 investors.

Pair Trading with Apple and TELEFO

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

The idea behind Apple Inc and TELEFO 495 17 JUL 30 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.