Correlation Between Corporacion Aceros and Apple

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

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

Diversification Opportunities for Corporacion Aceros and Apple

0.33

Correlation Coefficient

Corporacion Aceros  Apple

Weak diversification

The 3 months correlation between Corporacion and Apple is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Corporacion Aceros Arequipa and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Corporacion Aceros 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 Corporacion Aceros Arequipa 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 Corporacion Aceros i.e., Corporacion Aceros and Apple go up and down completely randomly.

Pair Corralation between Corporacion Aceros and Apple

Assuming the 90 days trading horizon Corporacion Aceros Arequipa is expected to generate 0.96 times more return on investment than Apple. However, Corporacion Aceros Arequipa is 1.04 times less risky than Apple. It trades about -0.01 of its potential returns per unit of risk. Apple Inc is currently generating about -0.12 per unit of risk. If you would invest  101.00  in Corporacion Aceros Arequipa on December 26, 2024 and sell it today you would lose (2.00) from holding Corporacion Aceros Arequipa or give up 1.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Corporacion Aceros Arequipa  vs.  Apple Inc

Corporacion Aceros

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corporacion Aceros Arequipa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Corporacion Aceros is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

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. Despite unsteady performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Corporacion Aceros and Apple

The main advantage of trading using opposite Corporacion Aceros and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporacion Aceros 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 Corporacion Aceros Arequipa 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.