Correlation Between InRetail Peru and Apple

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

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

Diversification Opportunities for InRetail Peru and Apple

0.24

Correlation Coefficient

InRetail Peru  Apple

Modest diversification

The 3 months correlation between InRetail and Apple is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding InRetail Peru Corp and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and InRetail Peru 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 InRetail Peru Corp 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 InRetail Peru i.e., InRetail Peru and Apple go up and down completely randomly.

Pair Corralation between InRetail Peru and Apple

Assuming the 90 days trading horizon InRetail Peru Corp is expected to generate 0.6 times more return on investment than Apple. However, InRetail Peru Corp is 1.67 times less risky than Apple. It trades about 0.23 of its potential returns per unit of risk. Apple Inc is currently generating about -0.02 per unit of risk. If you would invest  3,085  in InRetail Peru Corp on October 12, 2024 and sell it today you would earn a total of  85.00  from holding InRetail Peru Corp or generate 2.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.0%
Values	Daily Returns

InRetail Peru Corp  vs.  Apple Inc

InRetail Peru Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InRetail Peru Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, InRetail Peru is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Apple Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with InRetail Peru and Apple

The main advantage of trading using opposite InRetail Peru and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InRetail Peru 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 InRetail Peru Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.