Correlation Between Apple and INDUSTRIAL MINERALS

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

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

Diversification Opportunities for Apple and INDUSTRIAL MINERALS

-0.36

Correlation Coefficient

Apple  INDUSTRIAL MINERALS

Very good diversification

The 3 months correlation between Apple and INDUSTRIAL is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and INDUSTRIAL MINERALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDUSTRIAL MINERALS LTD 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 INDUSTRIAL MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDUSTRIAL MINERALS LTD has no effect on the direction of Apple i.e., Apple and INDUSTRIAL MINERALS go up and down completely randomly.

Pair Corralation between Apple and INDUSTRIAL MINERALS

Assuming the 90 days trading horizon Apple Inc is expected to under-perform the INDUSTRIAL MINERALS. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 4.45 times less risky than INDUSTRIAL MINERALS. The stock trades about -0.18 of its potential returns per unit of risk. The INDUSTRIAL MINERALS LTD is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  7.95  in INDUSTRIAL MINERALS LTD on December 23, 2024 and sell it today you would earn a total of  1.40  from holding INDUSTRIAL MINERALS LTD or generate 17.61% return on investment over 90 days.

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

Apple Inc  vs.  INDUSTRIAL MINERALS LTD

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 comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

INDUSTRIAL MINERALS LTD

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in INDUSTRIAL MINERALS LTD are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, INDUSTRIAL MINERALS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and INDUSTRIAL MINERALS

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

The idea behind Apple Inc and INDUSTRIAL MINERALS LTD 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.