Correlation Between Apple and ANGLO ASIAN

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

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

Diversification Opportunities for Apple and ANGLO ASIAN

-0.13

Correlation Coefficient

Apple  ANGLO ASIAN

Good diversification

The 3 months correlation between Apple and ANGLO is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ANGLO ASIAN MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGLO ASIAN MINING 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 ANGLO ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGLO ASIAN MINING has no effect on the direction of Apple i.e., Apple and ANGLO ASIAN go up and down completely randomly.

Pair Corralation between Apple and ANGLO ASIAN

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.5 times more return on investment than ANGLO ASIAN. However, Apple Inc is 1.98 times less risky than ANGLO ASIAN. It trades about 0.22 of its potential returns per unit of risk. ANGLO ASIAN MINING is currently generating about 0.0 per unit of risk. If you would invest  20,236  in Apple Inc on October 8, 2024 and sell it today you would earn a total of  3,424  from holding Apple Inc or generate 16.92% return on investment over 90 days.

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

Apple Inc  vs.  ANGLO ASIAN MINING

Apple Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Apple exhibited solid returns over the last few months and may actually be approaching a breakup point.

ANGLO ASIAN MINING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANGLO ASIAN MINING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ANGLO ASIAN is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Apple and ANGLO ASIAN

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

The idea behind Apple Inc and ANGLO ASIAN MINING 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.