Correlation Between Apple and DATADOT TECHNOLOGY

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

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

Diversification Opportunities for Apple and DATADOT TECHNOLOGY

0.0

Correlation Coefficient

Apple  DATADOT TECHNOLOGY

Pay attention - limited upside

The 3 months correlation between Apple and DATADOT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and DATADOT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATADOT TECHNOLOGY 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 DATADOT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATADOT TECHNOLOGY has no effect on the direction of Apple i.e., Apple and DATADOT TECHNOLOGY go up and down completely randomly.

Pair Corralation between Apple and DATADOT TECHNOLOGY

If you would invest  20,236  in Apple Inc on October 8, 2024 and sell it today you would earn a total of  3,434  from holding Apple Inc or generate 16.97% return on investment over 90 days.

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

Apple Inc  vs.  DATADOT TECHNOLOGY

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.

DATADOT TECHNOLOGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DATADOT TECHNOLOGY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, DATADOT TECHNOLOGY 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 DATADOT TECHNOLOGY

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

The idea behind Apple Inc and DATADOT TECHNOLOGY 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.