Correlation Between Homerun Resources and Apple
Can any of the company-specific risk be diversified away by investing in both Homerun Resources 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 Homerun Resources and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homerun Resources and Apple Inc CDR, you can compare the effects of market volatilities on Homerun Resources 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 Homerun Resources with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homerun Resources and Apple.
Diversification Opportunities for Homerun Resources and Apple
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Homerun and Apple is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Homerun Resources and Apple Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc CDR and Homerun Resources 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 Homerun Resources 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 CDR has no effect on the direction of Homerun Resources i.e., Homerun Resources and Apple go up and down completely randomly.
Pair Corralation between Homerun Resources and Apple
Assuming the 90 days horizon Homerun Resources is expected to generate 1.44 times less return on investment than Apple. In addition to that, Homerun Resources is 4.37 times more volatile than Apple Inc CDR. It trades about 0.02 of its total potential returns per unit of risk. Apple Inc CDR is currently generating about 0.11 per unit of volatility. If you would invest 3,313 in Apple Inc CDR on October 8, 2024 and sell it today you would earn a total of 250.00 from holding Apple Inc CDR or generate 7.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Homerun Resources vs. Apple Inc CDR
Performance |
Timeline |
Homerun Resources |
Apple Inc CDR |
Homerun Resources and Apple Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Homerun Resources and Apple
The main advantage of trading using opposite Homerun Resources and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homerun Resources 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.Homerun Resources vs. Laurentian Bank | Homerun Resources vs. VersaBank | Homerun Resources vs. Precision Drilling | Homerun Resources vs. Canadian Imperial Bank |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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