Correlation Between Ecclesiastical Insurance and Apple

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

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

Diversification Opportunities for Ecclesiastical Insurance and Apple

0.19

Correlation Coefficient

Ecclesiastical Insurance  Apple

Average diversification

The 3 months correlation between Ecclesiastical and Apple is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ecclesiastical Insurance Offic and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Ecclesiastical Insurance 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 Ecclesiastical Insurance Office 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 Ecclesiastical Insurance i.e., Ecclesiastical Insurance and Apple go up and down completely randomly.

Pair Corralation between Ecclesiastical Insurance and Apple

Assuming the 90 days trading horizon Ecclesiastical Insurance is expected to generate 4.81 times less return on investment than Apple. But when comparing it to its historical volatility, Ecclesiastical Insurance Office is 2.86 times less risky than Apple. It trades about 0.03 of its potential returns per unit of risk. Apple Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  14,843  in Apple Inc on October 24, 2024 and sell it today you would earn a total of  7,157  from holding Apple Inc or generate 48.22% return on investment over 90 days.

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

Ecclesiastical Insurance Offic  vs.  Apple Inc

Ecclesiastical Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecclesiastical Insurance Office has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ecclesiastical Insurance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Apple Inc

Risk-Adjusted Performance

0 of 100

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 comparatively stable basic indicators, Apple is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ecclesiastical Insurance and Apple

The main advantage of trading using opposite Ecclesiastical Insurance and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecclesiastical Insurance 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 Ecclesiastical Insurance Office 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.