Correlation Between Apple and WBX WT

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

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

Diversification Opportunities for Apple and WBX WT

-0.15

Correlation Coefficient

Apple  WBX WT

Good diversification

The 3 months correlation between Apple and WBX is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and WBX WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WBX WT 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 WBX WT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WBX WT has no effect on the direction of Apple i.e., Apple and WBX WT go up and down completely randomly.

Pair Corralation between Apple and WBX WT

Given the investment horizon of 90 days Apple is expected to generate 5.67 times less return on investment than WBX WT. But when comparing it to its historical volatility, Apple Inc is 28.19 times less risky than WBX WT. It trades about 0.56 of its potential returns per unit of risk. WBX WT is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4.01  in WBX WT on September 21, 2024 and sell it today you would earn a total of  0.03  from holding WBX WT or generate 0.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.36%
Values	Daily Returns

Apple Inc  vs.  WBX WT

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 inconsistent basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

WBX WT

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WBX WT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, WBX WT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and WBX WT

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

The idea behind Apple Inc and WBX WT 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.