Correlation Between Apple and PATRIOT BATTERY

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

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

Diversification Opportunities for Apple and PATRIOT BATTERY

-0.59

Correlation Coefficient

Apple  PATRIOT BATTERY

Excellent diversification

The 3 months correlation between Apple and PATRIOT is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and PATRIOT BATTERY METINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PATRIOT BATTERY METINC 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 PATRIOT BATTERY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PATRIOT BATTERY METINC has no effect on the direction of Apple i.e., Apple and PATRIOT BATTERY go up and down completely randomly.

Pair Corralation between Apple and PATRIOT BATTERY

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.25 times more return on investment than PATRIOT BATTERY. However, Apple Inc is 4.02 times less risky than PATRIOT BATTERY. It trades about 0.1 of its potential returns per unit of risk. PATRIOT BATTERY METINC is currently generating about 0.0 per unit of risk. If you would invest  12,063  in Apple Inc on September 17, 2024 and sell it today you would earn a total of  11,452  from holding Apple Inc or generate 94.93% return on investment over 90 days.

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

Apple Inc  vs.  PATRIOT BATTERY METINC

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 unsteady fundamental indicators, Apple sustained solid returns over the last few months and may actually be approaching a breakup point.

PATRIOT BATTERY METINC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PATRIOT BATTERY METINC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental 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 PATRIOT BATTERY

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

The idea behind Apple Inc and PATRIOT BATTERY METINC 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..