Correlation Between Apple and MIRAMAR HOTEL

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

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

Diversification Opportunities for Apple and MIRAMAR HOTEL

0.3

Correlation Coefficient

Apple  MIRAMAR HOTEL

Weak diversification

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

Pair Corralation between Apple and MIRAMAR HOTEL

Assuming the 90 days trading horizon Apple Inc is expected to generate 2.07 times more return on investment than MIRAMAR HOTEL. However, Apple is 2.07 times more volatile than MIRAMAR HOTEL INV. It trades about -0.04 of its potential returns per unit of risk. MIRAMAR HOTEL INV is currently generating about -0.13 per unit of risk. If you would invest  23,605  in Apple Inc on December 2, 2024 and sell it today you would lose (730.00) from holding Apple Inc or give up 3.09% of portfolio value over 90 days.

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

Apple Inc  vs.  MIRAMAR HOTEL INV

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 comparatively stable fundamental indicators, Apple is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

MIRAMAR HOTEL INV

Risk-Adjusted Performance

Very Weak

Over the last 90 days MIRAMAR HOTEL INV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, MIRAMAR HOTEL is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Apple and MIRAMAR HOTEL

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

The idea behind Apple Inc and MIRAMAR HOTEL INV 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.