Correlation Between Apple and Polyplex Public

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

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

Diversification Opportunities for Apple and Polyplex Public

0.86

Correlation Coefficient

Apple  Polyplex Public

Very poor diversification

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

Pair Corralation between Apple and Polyplex Public

Assuming the 90 days trading horizon Apple is expected to generate 6.92 times less return on investment than Polyplex Public. But when comparing it to its historical volatility, Apple Inc is 14.26 times less risky than Polyplex Public. It trades about 0.26 of its potential returns per unit of risk. Polyplex Public is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Polyplex Public on October 5, 2024 and sell it today you would earn a total of  17.00  from holding Polyplex Public or generate 121.43% 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.  Polyplex Public

Apple Inc

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather uncertain fundamental indicators, Apple exhibited solid returns over the last few months and may actually be approaching a breakup point.

Polyplex Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Polyplex Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Polyplex Public reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and Polyplex Public

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

The idea behind Apple Inc and Polyplex Public 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.

Check out your portfolio center.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.