Correlation Between REVO INSURANCE and Apple

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Can any of the company-specific risk be diversified away by investing in both REVO 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 REVO INSURANCE and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REVO INSURANCE SPA and Apple Inc, you can compare the effects of market volatilities on REVO 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 REVO INSURANCE with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and Apple.

Diversification Opportunities for REVO INSURANCE and Apple

REVOAppleDiversified AwayREVOAppleDiversified Away100%
0.89
  Correlation Coefficient

Very poor diversification

The 3 months correlation between REVO and Apple is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and REVO 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 REVO INSURANCE SPA 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 REVO INSURANCE i.e., REVO INSURANCE and Apple go up and down completely randomly.

Pair Corralation between REVO INSURANCE and Apple

Assuming the 90 days horizon REVO INSURANCE is expected to generate 1.0 times less return on investment than Apple. But when comparing it to its historical volatility, REVO INSURANCE SPA is 1.25 times less risky than Apple. It trades about 0.28 of its potential returns per unit of risk. Apple Inc is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  19,345  in Apple Inc on September 15, 2024 and sell it today you would earn a total of  4,270  from holding Apple Inc or generate 22.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

REVO INSURANCE SPA  vs.  Apple Inc

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 05101520
JavaScript chart by amCharts 3.21.15H0O APC
       Timeline  
REVO INSURANCE SPA 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in REVO INSURANCE SPA are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, REVO INSURANCE reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec99.51010.511
Apple Inc 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec200205210215220225230235

REVO INSURANCE and Apple Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.33-2.49-1.66-0.820.00.941.92.853.81 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.15H0O APC
       Returns  

Pair Trading with REVO INSURANCE and Apple

The main advantage of trading using opposite REVO INSURANCE and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO 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 REVO INSURANCE SPA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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