Correlation Between Apple and CALTAGIRONE EDITORE

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

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

Diversification Opportunities for Apple and CALTAGIRONE EDITORE

0.16

Correlation Coefficient

Apple  CALTAGIRONE EDITORE

Average diversification

The 3 months correlation between Apple and CALTAGIRONE is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and CALTAGIRONE EDITORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CALTAGIRONE EDITORE has no effect on the direction of Apple i.e., Apple and CALTAGIRONE EDITORE go up and down completely randomly.

Pair Corralation between Apple and CALTAGIRONE EDITORE

Assuming the 90 days trading horizon Apple is expected to generate 1.08 times less return on investment than CALTAGIRONE EDITORE. But when comparing it to its historical volatility, Apple Inc is 1.61 times less risky than CALTAGIRONE EDITORE. It trades about 0.19 of its potential returns per unit of risk. CALTAGIRONE EDITORE is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  116.00  in CALTAGIRONE EDITORE on October 9, 2024 and sell it today you would earn a total of  16.00  from holding CALTAGIRONE EDITORE or generate 13.79% return on investment over 90 days.

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

Apple Inc  vs.  CALTAGIRONE EDITORE

Apple Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Apple exhibited solid returns over the last few months and may actually be approaching a breakup point.

CALTAGIRONE EDITORE

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CALTAGIRONE EDITORE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CALTAGIRONE EDITORE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and CALTAGIRONE EDITORE

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

The idea behind Apple Inc and CALTAGIRONE EDITORE 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.