Correlation Between GX AI and Apple

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

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

Diversification Opportunities for GX AI and Apple

0.91

Correlation Coefficient

GX AI  Apple

Almost no diversification

The 3 months correlation between BAIQ39 and Apple is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding GX AI TECH and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and GX AI 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 GX AI TECH 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 GX AI i.e., GX AI and Apple go up and down completely randomly.

Pair Corralation between GX AI and Apple

Assuming the 90 days trading horizon GX AI is expected to generate 1.04 times less return on investment than Apple. But when comparing it to its historical volatility, GX AI TECH is 1.14 times less risky than Apple. It trades about 0.3 of its potential returns per unit of risk. Apple Inc is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  5,940  in Apple Inc on September 14, 2024 and sell it today you would earn a total of  1,521  from holding Apple Inc or generate 25.61% return on investment over 90 days.

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

GX AI TECH  vs.  Apple Inc

GX AI TECH

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GX AI TECH are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, GX AI sustained solid returns over the last few months and may actually be approaching a breakup point.

Apple Inc

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Apple sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GX AI and Apple

The main advantage of trading using opposite GX AI and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GX AI 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 GX AI TECH 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.