Correlation Between Apple and Huntington Ingalls
Can any of the company-specific risk be diversified away by investing in both Apple and Huntington Ingalls 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 Huntington Ingalls into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Huntington Ingalls Industries,, you can compare the effects of market volatilities on Apple and Huntington Ingalls 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 Huntington Ingalls. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Huntington Ingalls.
Diversification Opportunities for Apple and Huntington Ingalls
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and Huntington is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Huntington Ingalls Industries, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Ingalls 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 Huntington Ingalls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntington Ingalls has no effect on the direction of Apple i.e., Apple and Huntington Ingalls go up and down completely randomly.
Pair Corralation between Apple and Huntington Ingalls
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the Huntington Ingalls. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.58 times less risky than Huntington Ingalls. The stock trades about -0.24 of its potential returns per unit of risk. The Huntington Ingalls Industries, is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,518 in Huntington Ingalls Industries, on October 15, 2024 and sell it today you would lose (6.00) from holding Huntington Ingalls Industries, or give up 0.4% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Apple Inc vs. Huntington Ingalls Industries,
Performance |
Timeline |
Apple Inc |
Huntington Ingalls |
Apple and Huntington Ingalls Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apple and Huntington Ingalls
The main advantage of trading using opposite Apple and Huntington Ingalls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Huntington Ingalls 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 Huntington Ingalls will offset losses from the drop in Huntington Ingalls' long position.Apple vs. MAHLE Metal Leve | Apple vs. Autohome | Apple vs. Metalurgica Gerdau SA | Apple vs. Liberty Broadband |
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Check out your portfolio center.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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