Correlation Between Apple and Intouch Holdings

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

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

Diversification Opportunities for Apple and Intouch Holdings

0.56

Correlation Coefficient

Apple  Intouch Holdings

Very weak diversification

The 3 months correlation between Apple and Intouch is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Intouch Holdings PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intouch Holdings PCL 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 Intouch Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intouch Holdings PCL has no effect on the direction of Apple i.e., Apple and Intouch Holdings go up and down completely randomly.

Pair Corralation between Apple and Intouch Holdings

Assuming the 90 days trading horizon Apple Inc is expected to under-perform the Intouch Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.46 times less risky than Intouch Holdings. The stock trades about -0.18 of its potential returns per unit of risk. The Intouch Holdings PCL is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  244.00  in Intouch Holdings PCL on December 23, 2024 and sell it today you would lose (30.00) from holding Intouch Holdings PCL or give up 12.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Apple Inc  vs.  Intouch Holdings PCL

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.

Intouch Holdings PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intouch Holdings PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Apple and Intouch Holdings

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

The idea behind Apple Inc and Intouch Holdings PCL 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .