Correlation Between Apple and ABO GROUP

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

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

Diversification Opportunities for Apple and ABO GROUP

-0.82

Correlation Coefficient

Apple  ABO GROUP

Pay attention - limited upside

The 3 months correlation between Apple and ABO is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ABO GROUP ENVIRONMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABO GROUP ENVIRONMENT 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 ABO GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABO GROUP ENVIRONMENT has no effect on the direction of Apple i.e., Apple and ABO GROUP go up and down completely randomly.

Pair Corralation between Apple and ABO GROUP

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.66 times more return on investment than ABO GROUP. However, Apple Inc is 1.51 times less risky than ABO GROUP. It trades about 0.49 of its potential returns per unit of risk. ABO GROUP ENVIRONMENT is currently generating about -0.18 per unit of risk. If you would invest  21,325  in Apple Inc on September 16, 2024 and sell it today you would earn a total of  2,190  from holding Apple Inc or generate 10.27% return on investment over 90 days.

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

Apple Inc  vs.  ABO GROUP ENVIRONMENT

Apple Inc

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Apple sustained solid returns over the last few months and may actually be approaching a breakup point.

ABO GROUP ENVIRONMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABO GROUP ENVIRONMENT 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 basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Apple and ABO GROUP

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

The idea behind Apple Inc and ABO GROUP ENVIRONMENT 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.