Correlation Between Apple and KLONDIKE SILVER

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

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

Diversification Opportunities for Apple and KLONDIKE SILVER

-0.62

Correlation Coefficient

Apple  KLONDIKE SILVER

Excellent diversification

The 3 months correlation between Apple and KLONDIKE is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and KLONDIKE SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLONDIKE SILVER 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 KLONDIKE SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLONDIKE SILVER has no effect on the direction of Apple i.e., Apple and KLONDIKE SILVER go up and down completely randomly.

Pair Corralation between Apple and KLONDIKE SILVER

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.22 times more return on investment than KLONDIKE SILVER. However, Apple Inc is 4.56 times less risky than KLONDIKE SILVER. It trades about 0.22 of its potential returns per unit of risk. KLONDIKE SILVER is currently generating about -0.05 per unit of risk. If you would invest  20,481  in Apple Inc on October 8, 2024 and sell it today you would earn a total of  3,074  from holding Apple Inc or generate 15.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Apple Inc  vs.  KLONDIKE SILVER

Apple Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.

KLONDIKE SILVER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KLONDIKE SILVER 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Apple and KLONDIKE SILVER

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

The idea behind Apple Inc and KLONDIKE SILVER 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.