Correlation Between Apple and BANKINTER ADR

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

By analyzing existing cross correlation between Apple Inc and BANKINTER ADR 2007, you can compare the effects of market volatilities on Apple and BANKINTER ADR 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 BANKINTER ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and BANKINTER ADR.

Diversification Opportunities for Apple and BANKINTER ADR

-0.45

Correlation Coefficient

Apple  BANKINTER ADR

Very good diversification

The 3 months correlation between Apple and BANKINTER is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and BANKINTER ADR 2007 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANKINTER ADR 2007 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 BANKINTER ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANKINTER ADR 2007 has no effect on the direction of Apple i.e., Apple and BANKINTER ADR go up and down completely randomly.

Pair Corralation between Apple and BANKINTER ADR

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.79 times more return on investment than BANKINTER ADR. However, Apple Inc is 1.26 times less risky than BANKINTER ADR. It trades about 0.1 of its potential returns per unit of risk. BANKINTER ADR 2007 is currently generating about -0.05 per unit of risk. If you would invest  20,645  in Apple Inc on September 2, 2024 and sell it today you would earn a total of  1,750  from holding Apple Inc or generate 8.48% 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.  BANKINTER ADR 2007

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. In spite of very fragile fundamental indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BANKINTER ADR 2007

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANKINTER ADR 2007 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BANKINTER ADR 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 BANKINTER ADR

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

The idea behind Apple Inc and BANKINTER ADR 2007 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.