Correlation Between KINGBOARD CHEMICAL and Apple

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

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

Diversification Opportunities for KINGBOARD CHEMICAL and Apple

-0.57

Correlation Coefficient

KINGBOARD CHEMICAL  Apple

Excellent diversification

The 3 months correlation between KINGBOARD and Apple is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and Apple go up and down completely randomly.

Pair Corralation between KINGBOARD CHEMICAL and Apple

Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 1.4 times more return on investment than Apple. However, KINGBOARD CHEMICAL is 1.4 times more volatile than Apple Inc. It trades about 0.1 of its potential returns per unit of risk. Apple Inc is currently generating about -0.14 per unit of risk. If you would invest  234.00  in KINGBOARD CHEMICAL on December 30, 2024 and sell it today you would earn a total of  38.00  from holding KINGBOARD CHEMICAL or generate 16.24% return on investment over 90 days.

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

KINGBOARD CHEMICAL  vs.  Apple Inc

KINGBOARD CHEMICAL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KINGBOARD CHEMICAL are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, KINGBOARD CHEMICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with KINGBOARD CHEMICAL and Apple

The main advantage of trading using opposite KINGBOARD CHEMICAL and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.