Correlation Between Apple and Banco Do

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

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

Diversification Opportunities for Apple and Banco Do

-0.72

Correlation Coefficient

Apple  Banco Do

Pay attention - limited upside

The 3 months correlation between Apple and Banco is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Banco do Estado in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco do Estado 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 Banco Do. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco do Estado has no effect on the direction of Apple i.e., Apple and Banco Do go up and down completely randomly.

Pair Corralation between Apple and Banco Do

Assuming the 90 days trading horizon Apple Inc is expected to under-perform the Banco Do. In addition to that, Apple is 1.15 times more volatile than Banco do Estado. It trades about -0.17 of its total potential returns per unit of risk. Banco do Estado is currently generating about 0.1 per unit of volatility. If you would invest  1,000.00  in Banco do Estado on December 30, 2024 and sell it today you would earn a total of  94.00  from holding Banco do Estado or generate 9.4% return on investment over 90 days.

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

Apple Inc  vs.  Banco do Estado

Apple Inc

Risk-Adjusted Performance

Very Weak

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

Banco do Estado

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Banco do Estado are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Banco Do may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Apple and Banco Do

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

The idea behind Apple Inc and Banco do Estado 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.