Correlation Between WINDSTREAM HLDGS and Apple

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

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

Diversification Opportunities for WINDSTREAM HLDGS and Apple

-0.52

Correlation Coefficient

WINDSTREAM HLDGS  Apple

Excellent diversification

The 3 months correlation between WINDSTREAM and Apple is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding WINDSTREAM HLDGS and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and WINDSTREAM HLDGS 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 WINDSTREAM HLDGS are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of WINDSTREAM HLDGS i.e., WINDSTREAM HLDGS and Apple go up and down completely randomly.

Pair Corralation between WINDSTREAM HLDGS and Apple

Assuming the 90 days horizon WINDSTREAM HLDGS is expected to generate 172.03 times more return on investment than Apple. However, WINDSTREAM HLDGS is 172.03 times more volatile than Apple Inc. It trades about 0.33 of its potential returns per unit of risk. Apple Inc is currently generating about 0.06 per unit of risk. If you would invest  14.00  in WINDSTREAM HLDGS on December 11, 2024 and sell it today you would lose (6.17) from holding WINDSTREAM HLDGS or give up 44.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.73%
Values	Daily Returns

WINDSTREAM HLDGS  vs.  Apple Inc

WINDSTREAM HLDGS

Risk-Adjusted Performance

Solid

Over the last 90 days WINDSTREAM HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, WINDSTREAM HLDGS reported solid returns over the last few months and may actually be approaching a breakup point.

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 latest uncertain performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with WINDSTREAM HLDGS and Apple

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

The idea behind WINDSTREAM HLDGS and Apple Inc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.