Correlation Between Apple and SVENSKA CELLULO

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

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

Diversification Opportunities for Apple and SVENSKA CELLULO

-0.14

Correlation Coefficient

Apple  SVENSKA CELLULO

Good diversification

The 3 months correlation between Apple and SVENSKA is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SVENSKA CELLULO B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVENSKA CELLULO B 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 SVENSKA CELLULO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVENSKA CELLULO B has no effect on the direction of Apple i.e., Apple and SVENSKA CELLULO go up and down completely randomly.

Pair Corralation between Apple and SVENSKA CELLULO

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.63 times more return on investment than SVENSKA CELLULO. However, Apple Inc is 1.59 times less risky than SVENSKA CELLULO. It trades about 0.22 of its potential returns per unit of risk. SVENSKA CELLULO B is currently generating about -0.04 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Apple Inc  vs.  SVENSKA CELLULO B

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.

SVENSKA CELLULO B

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SVENSKA CELLULO B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SVENSKA CELLULO 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 SVENSKA CELLULO

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

The idea behind Apple Inc and SVENSKA CELLULO B 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.