Correlation Between Apple and Smartfit Escola

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

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

Diversification Opportunities for Apple and Smartfit Escola

-0.64

Correlation Coefficient

Apple  Smartfit Escola

Excellent diversification

The 3 months correlation between Apple and Smartfit is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Smartfit Escola de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smartfit Escola de 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 Smartfit Escola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smartfit Escola de has no effect on the direction of Apple i.e., Apple and Smartfit Escola go up and down completely randomly.

Pair Corralation between Apple and Smartfit Escola

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.62 times more return on investment than Smartfit Escola. However, Apple Inc is 1.61 times less risky than Smartfit Escola. It trades about 0.09 of its potential returns per unit of risk. Smartfit Escola de is currently generating about 0.02 per unit of risk. If you would invest  4,037  in Apple Inc on December 5, 2024 and sell it today you would earn a total of  2,993  from holding Apple Inc or generate 74.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Apple Inc  vs.  Smartfit Escola de

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 somewhat strong basic indicators, Apple is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Smartfit Escola de

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smartfit Escola de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Smartfit Escola is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Apple and Smartfit Escola

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

The idea behind Apple Inc and Smartfit Escola de 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.