Correlation Between Apple and DIVIDEND GROWTH

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

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

Diversification Opportunities for Apple and DIVIDEND GROWTH

0.69

Correlation Coefficient

Apple  DIVIDEND GROWTH

Poor diversification

The 3 months correlation between Apple and DIVIDEND is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and DIVIDEND GROWTH SPLIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIVIDEND GROWTH 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 DIVIDEND GROWTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIVIDEND GROWTH SPLIT has no effect on the direction of Apple i.e., Apple and DIVIDEND GROWTH go up and down completely randomly.

Pair Corralation between Apple and DIVIDEND GROWTH

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.19 times more return on investment than DIVIDEND GROWTH. However, Apple Inc is 5.15 times less risky than DIVIDEND GROWTH. It trades about 0.65 of its potential returns per unit of risk. DIVIDEND GROWTH SPLIT is currently generating about -0.15 per unit of risk. If you would invest  22,395  in Apple Inc on September 27, 2024 and sell it today you would earn a total of  2,060  from holding Apple Inc or generate 9.2% return on investment over 90 days.

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

Apple Inc  vs.  DIVIDEND GROWTH SPLIT

Apple Inc

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Apple displayed solid returns over the last few months and may actually be approaching a breakup point.

DIVIDEND GROWTH SPLIT

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DIVIDEND GROWTH SPLIT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, DIVIDEND GROWTH 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 DIVIDEND GROWTH

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

The idea behind Apple Inc and DIVIDEND GROWTH 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.