Correlation Between Data Modul and Apple

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

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

Diversification Opportunities for Data Modul and Apple

0.06

Correlation Coefficient

Data Modul  Apple

Significant diversification

The 3 months correlation between Data and Apple is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Data Modul AG and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Data Modul 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 Data Modul AG 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 Data Modul i.e., Data Modul and Apple go up and down completely randomly.

Pair Corralation between Data Modul and Apple

Assuming the 90 days trading horizon Data Modul AG is expected to under-perform the Apple. In addition to that, Data Modul is 2.44 times more volatile than Apple Inc. It trades about -0.03 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.15 per unit of volatility. If you would invest  23,030  in Apple Inc on October 7, 2024 and sell it today you would earn a total of  525.00  from holding Apple Inc or generate 2.28% return on investment over 90 days.

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

Data Modul AG  vs.  Apple Inc

Data Modul AG

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Data Modul AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain primary indicators, Data Modul may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Apple Inc

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Data Modul and Apple

The main advantage of trading using opposite Data Modul and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data Modul 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 Data Modul AG 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.