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

0.61

Correlation Coefficient

Apple  DBS GROUP

Poor diversification

The 3 months correlation between Apple and DBS is 0.61. 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 is expected to generate 3.24 times less return on investment than DBS GROUP. But when comparing it to its historical volatility, Apple Inc is 1.01 times less risky than DBS GROUP. It trades about 0.04 of its potential returns per unit of risk. DBS GROUP HLDGS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,658  in DBS GROUP HLDGS on October 24, 2024 and sell it today you would earn a total of  458.00  from holding DBS GROUP HLDGS or generate 17.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.78%
Values	Daily Returns

Apple Inc  vs.  DBS GROUP HLDGS

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 comparatively stable fundamental indicators, Apple is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

DBS GROUP HLDGS

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DBS GROUP HLDGS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.