Correlation Between Apple and AURELIUS Equity

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

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

Diversification Opportunities for Apple and AURELIUS Equity

0.86

Correlation Coefficient

Apple  AURELIUS Equity

Very poor diversification

The 3 months correlation between Apple and AURELIUS is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and AURELIUS Equity Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AURELIUS Equity Oppo 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 AURELIUS Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AURELIUS Equity Oppo has no effect on the direction of Apple i.e., Apple and AURELIUS Equity go up and down completely randomly.

Pair Corralation between Apple and AURELIUS Equity

If you would invest  22,960  in Apple Inc on October 4, 2024 and sell it today you would earn a total of  1,285  from holding Apple Inc or generate 5.6% return on investment over 90 days.

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

Apple Inc  vs.  AURELIUS Equity Opportunities

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.

AURELIUS Equity Oppo

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AURELIUS Equity Opportunities are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AURELIUS Equity unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and AURELIUS Equity

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

The idea behind Apple Inc and AURELIUS Equity Opportunities 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.