Correlation Between Apple and INFORMATION SVC

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

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

Diversification Opportunities for Apple and INFORMATION SVC

0.19

Correlation Coefficient

Apple  INFORMATION SVC

Average diversification

The 3 months correlation between Apple and INFORMATION is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and INFORMATION SVC GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFORMATION SVC GRP 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 INFORMATION SVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFORMATION SVC GRP has no effect on the direction of Apple i.e., Apple and INFORMATION SVC go up and down completely randomly.

Pair Corralation between Apple and INFORMATION SVC

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.54 times more return on investment than INFORMATION SVC. However, Apple Inc is 1.87 times less risky than INFORMATION SVC. It trades about 0.03 of its potential returns per unit of risk. INFORMATION SVC GRP is currently generating about 0.0 per unit of risk. If you would invest  22,576  in Apple Inc on December 2, 2024 and sell it today you would earn a total of  169.00  from holding Apple Inc or generate 0.75% return on investment over 90 days.

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

Apple Inc  vs.  INFORMATION SVC GRP

Apple Inc

Risk-Adjusted Performance

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

INFORMATION SVC GRP

Risk-Adjusted Performance

Very Weak

Over the last 90 days INFORMATION SVC GRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Apple and INFORMATION SVC

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

The idea behind Apple Inc and INFORMATION SVC GRP 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.