Correlation Between Apple and HEALTHCARE TRPFD

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

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

Diversification Opportunities for Apple and HEALTHCARE TRPFD

-0.47

Correlation Coefficient

Apple  HEALTHCARE TRPFD

Very good diversification

The 3 months correlation between Apple and HEALTHCARE is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and HEALTHCARE TRPFD SH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE TRPFD 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 HEALTHCARE TRPFD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE TRPFD has no effect on the direction of Apple i.e., Apple and HEALTHCARE TRPFD go up and down completely randomly.

Pair Corralation between Apple and HEALTHCARE TRPFD

Assuming the 90 days trading horizon Apple Inc is expected to under-perform the HEALTHCARE TRPFD. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 2.72 times less risky than HEALTHCARE TRPFD. The stock trades about -0.22 of its potential returns per unit of risk. The HEALTHCARE TRPFD SH is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,303  in HEALTHCARE TRPFD SH on October 15, 2024 and sell it today you would lose (3.00) from holding HEALTHCARE TRPFD SH or give up 0.23% of portfolio value over 90 days.

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

Apple Inc  vs.  HEALTHCARE TRPFD SH

Apple Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in February 2025.

HEALTHCARE TRPFD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HEALTHCARE TRPFD SH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, HEALTHCARE TRPFD is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Apple and HEALTHCARE TRPFD

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

The idea behind Apple Inc and HEALTHCARE TRPFD SH 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.