Correlation Between Apple and METTLER TOLEDO

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

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

Diversification Opportunities for Apple and METTLER TOLEDO

0.43

Correlation Coefficient

Apple  METTLER TOLEDO

Very weak diversification

The 3 months correlation between Apple and METTLER is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and METTLER TOLEDO INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METTLER TOLEDO INTL 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 METTLER TOLEDO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METTLER TOLEDO INTL has no effect on the direction of Apple i.e., Apple and METTLER TOLEDO go up and down completely randomly.

Pair Corralation between Apple and METTLER TOLEDO

Assuming the 90 days trading horizon Apple Inc is expected to under-perform the METTLER TOLEDO. In addition to that, Apple is 1.46 times more volatile than METTLER TOLEDO INTL. It trades about -0.13 of its total potential returns per unit of risk. METTLER TOLEDO INTL is currently generating about -0.07 per unit of volatility. If you would invest  119,000  in METTLER TOLEDO INTL on December 27, 2024 and sell it today you would lose (7,800) from holding METTLER TOLEDO INTL or give up 6.55% of portfolio value over 90 days.

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

Apple Inc  vs.  METTLER TOLEDO INTL

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. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

METTLER TOLEDO INTL

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Apple and METTLER TOLEDO

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

The idea behind Apple Inc and METTLER TOLEDO INTL 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.