Correlation Between Apple and CHRISTIAN DIOR

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

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

Diversification Opportunities for Apple and CHRISTIAN DIOR

0.26

Correlation Coefficient

Apple  CHRISTIAN DIOR

Modest diversification

The 3 months correlation between Apple and CHRISTIAN is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and CHRISTIAN DIOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHRISTIAN DIOR 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 CHRISTIAN DIOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHRISTIAN DIOR has no effect on the direction of Apple i.e., Apple and CHRISTIAN DIOR go up and down completely randomly.

Pair Corralation between Apple and CHRISTIAN DIOR

Assuming the 90 days trading horizon Apple Inc is expected to under-perform the CHRISTIAN DIOR. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.03 times less risky than CHRISTIAN DIOR. The stock trades about -0.2 of its potential returns per unit of risk. The CHRISTIAN DIOR is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  58,800  in CHRISTIAN DIOR on December 22, 2024 and sell it today you would lose (3,200) from holding CHRISTIAN DIOR or give up 5.44% of portfolio value over 90 days.

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

Apple Inc  vs.  CHRISTIAN DIOR

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CHRISTIAN DIOR

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHRISTIAN DIOR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CHRISTIAN DIOR is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Apple and CHRISTIAN DIOR

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

The idea behind Apple Inc and CHRISTIAN DIOR 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.