Correlation Between Apple and UNITED URBAN

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

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

Diversification Opportunities for Apple and UNITED URBAN

-0.15

Correlation Coefficient

Apple  UNITED URBAN

Good diversification

The 3 months correlation between Apple and UNITED is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and UNITED URBAN INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED URBAN 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 UNITED URBAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED URBAN INV has no effect on the direction of Apple i.e., Apple and UNITED URBAN go up and down completely randomly.

Pair Corralation between Apple and UNITED URBAN

Assuming the 90 days trading horizon Apple Inc is expected to under-perform the UNITED URBAN. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.14 times less risky than UNITED URBAN. The stock trades about -0.13 of its potential returns per unit of risk. The UNITED URBAN INV is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  81,000  in UNITED URBAN INV on December 26, 2024 and sell it today you would earn a total of  9,500  from holding UNITED URBAN INV or generate 11.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Apple Inc  vs.  UNITED URBAN 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. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

UNITED URBAN INV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UNITED URBAN INV are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, UNITED URBAN reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and UNITED URBAN

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

The idea behind Apple Inc and UNITED URBAN 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.