Correlation Between Apple and LIFE +

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

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

Diversification Opportunities for Apple and LIFE +

0.02

Correlation Coefficient

Apple  LIFE +

Significant diversification

The 3 months correlation between Apple and LIFE is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and LIFE BANC SPLIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFE BANC SPLIT 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 LIFE +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFE BANC SPLIT has no effect on the direction of Apple i.e., Apple and LIFE + go up and down completely randomly.

Pair Corralation between Apple and LIFE +

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.48 times more return on investment than LIFE +. However, Apple Inc is 2.08 times less risky than LIFE +. It trades about 0.02 of its potential returns per unit of risk. LIFE BANC SPLIT is currently generating about -0.06 per unit of risk. If you would invest  22,790  in Apple Inc on December 1, 2024 and sell it today you would earn a total of  200.00  from holding Apple Inc or generate 0.88% return on investment over 90 days.

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

Apple Inc  vs.  LIFE BANC SPLIT

Apple Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Apple is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

LIFE BANC SPLIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days LIFE BANC SPLIT 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 LIFE +

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

The idea behind Apple Inc and LIFE BANC SPLIT 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.