Correlation Between Apple and Globe Trade

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

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

Diversification Opportunities for Apple and Globe Trade

-0.74

Correlation Coefficient

Apple  Globe Trade

Pay attention - limited upside

The 3 months correlation between Apple and Globe is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Globe Trade Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Trade Centre 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 Globe Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Trade Centre has no effect on the direction of Apple i.e., Apple and Globe Trade go up and down completely randomly.

Pair Corralation between Apple and Globe Trade

Assuming the 90 days trading horizon Apple Inc is expected to under-perform the Globe Trade. In addition to that, Apple is 2.18 times more volatile than Globe Trade Centre. It trades about -0.13 of its total potential returns per unit of risk. Globe Trade Centre is currently generating about 0.15 per unit of volatility. If you would invest  91.00  in Globe Trade Centre on December 29, 2024 and sell it today you would earn a total of  7.00  from holding Globe Trade Centre or generate 7.69% 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.  Globe Trade Centre

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 fragile 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.

Globe Trade Centre

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Globe Trade Centre are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Globe Trade may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Apple and Globe Trade

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

The idea behind Apple Inc and Globe Trade Centre 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.