Correlation Between Apple and RTL GROUP

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

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

Diversification Opportunities for Apple and RTL GROUP

-0.69

Correlation Coefficient

Apple  RTL GROUP

Excellent diversification

The 3 months correlation between Apple and RTL is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and RTL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTL GROUP 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 RTL GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTL GROUP has no effect on the direction of Apple i.e., Apple and RTL GROUP go up and down completely randomly.

Pair Corralation between Apple and RTL GROUP

Assuming the 90 days trading horizon Apple Inc is expected to under-perform the RTL GROUP. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.15 times less risky than RTL GROUP. The stock trades about -0.17 of its potential returns per unit of risk. The RTL GROUP is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,625  in RTL GROUP on December 21, 2024 and sell it today you would earn a total of  490.00  from holding RTL GROUP or generate 18.67% return on investment over 90 days.

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

Apple Inc  vs.  RTL GROUP

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.

RTL GROUP

Risk-Adjusted Performance

OK

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

Pair Trading with Apple and RTL GROUP

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

The idea behind Apple Inc and RTL GROUP 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.