Correlation Between Apple and ADHI KARYA

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

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

Diversification Opportunities for Apple and ADHI KARYA

-0.75

Correlation Coefficient

Apple  ADHI KARYA

Pay attention - limited upside

The 3 months correlation between Apple and ADHI is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ADHI KARYA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADHI KARYA 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 ADHI KARYA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADHI KARYA has no effect on the direction of Apple i.e., Apple and ADHI KARYA go up and down completely randomly.

Pair Corralation between Apple and ADHI KARYA

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.37 times more return on investment than ADHI KARYA. However, Apple Inc is 2.72 times less risky than ADHI KARYA. It trades about 0.28 of its potential returns per unit of risk. ADHI KARYA is currently generating about -0.16 per unit of risk. If you would invest  20,266  in Apple Inc on October 1, 2024 and sell it today you would earn a total of  4,334  from holding Apple Inc or generate 21.39% return on investment over 90 days.

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

Apple Inc  vs.  ADHI KARYA

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 comparatively uncertain fundamental indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.

ADHI KARYA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ADHI KARYA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Apple and ADHI KARYA

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

The idea behind Apple Inc and ADHI KARYA 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.