Correlation Between Apple and VELA TECHNOLPLC

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

By analyzing existing cross correlation between Apple Inc and VELA TECHNOLPLC LS 0001, you can compare the effects of market volatilities on Apple and VELA TECHNOLPLC 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 VELA TECHNOLPLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and VELA TECHNOLPLC.

Diversification Opportunities for Apple and VELA TECHNOLPLC

0.0

Correlation Coefficient

Apple  VELA TECHNOLPLC

Pay attention - limited upside

The 3 months correlation between Apple and VELA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and VELA TECHNOLPLC LS 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VELA TECHNOLPLC LS 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 VELA TECHNOLPLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VELA TECHNOLPLC LS has no effect on the direction of Apple i.e., Apple and VELA TECHNOLPLC go up and down completely randomly.

Pair Corralation between Apple and VELA TECHNOLPLC

Assuming the 90 days trading horizon Apple is expected to generate 6.71 times less return on investment than VELA TECHNOLPLC. But when comparing it to its historical volatility, Apple Inc is 12.89 times less risky than VELA TECHNOLPLC. It trades about 0.07 of its potential returns per unit of risk. VELA TECHNOLPLC LS 0001 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.03  in VELA TECHNOLPLC LS 0001 on October 24, 2024 and sell it today you would earn a total of  0.02  from holding VELA TECHNOLPLC LS 0001 or generate 66.67% return on investment over 90 days.

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

Apple Inc  vs.  VELA TECHNOLPLC LS 0001

Apple Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

VELA TECHNOLPLC LS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VELA TECHNOLPLC LS 0001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, VELA TECHNOLPLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Apple and VELA TECHNOLPLC

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

The idea behind Apple Inc and VELA TECHNOLPLC LS 0001 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..