Correlation Between Elevance Health, and Apple

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

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

Diversification Opportunities for Elevance Health, and Apple

0.45

Correlation Coefficient

Elevance Health,  Apple

Very weak diversification

The 3 months correlation between Elevance and Apple is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Elevance Health, and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Elevance Health, 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 Elevance Health, 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 Elevance Health, i.e., Elevance Health, and Apple go up and down completely randomly.

Pair Corralation between Elevance Health, and Apple

Assuming the 90 days trading horizon Elevance Health, is expected to generate 0.71 times more return on investment than Apple. However, Elevance Health, is 1.4 times less risky than Apple. It trades about -0.09 of its potential returns per unit of risk. Apple Inc is currently generating about -0.2 per unit of risk. If you would invest  47,095  in Elevance Health, on December 25, 2024 and sell it today you would lose (3,355) from holding Elevance Health, or give up 7.12% of portfolio value over 90 days.

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

Elevance Health,  vs.  Apple Inc

Elevance Health,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elevance Health, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Elevance Health, and Apple

The main advantage of trading using opposite Elevance Health, and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elevance Health, 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 Elevance Health, 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.