Correlation Between Apple and DBS GROUP

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

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

Diversification Opportunities for Apple and DBS GROUP

0.51

Correlation Coefficient

Apple  DBS GROUP

Very weak diversification

The 3 months correlation between Apple and DBS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and DBS GROUP HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS GROUP HLDGS 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 DBS GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS GROUP HLDGS has no effect on the direction of Apple i.e., Apple and DBS GROUP go up and down completely randomly.

Pair Corralation between Apple and DBS GROUP

Assuming the 90 days trading horizon Apple Inc is expected to generate 1.44 times more return on investment than DBS GROUP. However, Apple is 1.44 times more volatile than DBS GROUP HLDGS. It trades about 0.1 of its potential returns per unit of risk. DBS GROUP HLDGS is currently generating about 0.11 per unit of risk. If you would invest  12,448  in Apple Inc on October 9, 2024 and sell it today you would earn a total of  11,177  from holding Apple Inc or generate 89.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Apple Inc  vs.  DBS GROUP HLDGS

Apple Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.

DBS GROUP HLDGS

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DBS GROUP HLDGS are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, DBS GROUP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and DBS GROUP

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

The idea behind Apple Inc and DBS GROUP HLDGS 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.