Correlation Between Apple and CHAODA MODERN

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

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

Diversification Opportunities for Apple and CHAODA MODERN

0.3

Correlation Coefficient

Apple  CHAODA MODERN

Weak diversification

The 3 months correlation between Apple and CHAODA is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and CHAODA MODERN AGRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHAODA MODERN AGRI 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 CHAODA MODERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHAODA MODERN AGRI has no effect on the direction of Apple i.e., Apple and CHAODA MODERN go up and down completely randomly.

Pair Corralation between Apple and CHAODA MODERN

Assuming the 90 days trading horizon Apple Inc is expected to under-perform the CHAODA MODERN. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 22.12 times less risky than CHAODA MODERN. The stock trades about -0.07 of its potential returns per unit of risk. The CHAODA MODERN AGRI is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2.00  in CHAODA MODERN AGRI on December 7, 2024 and sell it today you would earn a total of  0.10  from holding CHAODA MODERN AGRI or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	76.27%
Values	Daily Returns

Apple Inc  vs.  CHAODA MODERN AGRI

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 latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

CHAODA MODERN AGRI

Risk-Adjusted Performance

OK

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

Pair Trading with Apple and CHAODA MODERN

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

The idea behind Apple Inc and CHAODA MODERN AGRI 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.