Correlation Between INTERSHOP Communications and Apple

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

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

Diversification Opportunities for INTERSHOP Communications and Apple

-0.24

Correlation Coefficient

INTERSHOP Communications  Apple

Very good diversification

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

Pair Corralation between INTERSHOP Communications and Apple

Assuming the 90 days trading horizon INTERSHOP Communications is expected to generate 1.04 times less return on investment than Apple. In addition to that, INTERSHOP Communications is 2.1 times more volatile than Apple Inc. It trades about 0.06 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.13 per unit of volatility. If you would invest  21,225  in Apple Inc on October 13, 2024 and sell it today you would earn a total of  1,875  from holding Apple Inc or generate 8.83% return on investment over 90 days.

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

INTERSHOP Communications Aktie  vs.  Apple Inc

INTERSHOP Communications

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in INTERSHOP Communications Aktiengesellschaft are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, INTERSHOP Communications may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Apple Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with INTERSHOP Communications and Apple

The main advantage of trading using opposite INTERSHOP Communications and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERSHOP Communications 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 INTERSHOP Communications Aktiengesellschaft 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.