Correlation Between Loews Corp and Apple

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

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

Diversification Opportunities for Loews Corp and Apple

0.41

Correlation Coefficient

Loews Corp  Apple

Very weak diversification

The 3 months correlation between Loews and Apple is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Loews Corp 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 Loews 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 Loews Corp i.e., Loews Corp and Apple go up and down completely randomly.

Pair Corralation between Loews Corp and Apple

Assuming the 90 days trading horizon Loews Corp is expected to generate 1.0 times less return on investment than Apple. But when comparing it to its historical volatility, Loews Corp is 1.12 times less risky than Apple. It trades about 0.07 of its potential returns per unit of risk. Apple Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  14,163  in Apple Inc on October 25, 2024 and sell it today you would earn a total of  7,197  from holding Apple Inc or generate 50.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Loews Corp  vs.  Apple Inc

Loews Corp

Risk-Adjusted Performance

10 of 100

OK

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

Apple Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Apple is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Loews Corp and Apple

The main advantage of trading using opposite Loews Corp and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loews Corp 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 Loews 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.