Correlation Between PENINSULA ENERG and Apple

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

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

Diversification Opportunities for PENINSULA ENERG and Apple

-0.68

Correlation Coefficient

PENINSULA ENERG  Apple

Excellent diversification

The 3 months correlation between PENINSULA and Apple is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PENINSULA ENERG and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and PENINSULA ENERG 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 PENINSULA ENERG 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 PENINSULA ENERG i.e., PENINSULA ENERG and Apple go up and down completely randomly.

Pair Corralation between PENINSULA ENERG and Apple

Assuming the 90 days trading horizon PENINSULA ENERG is expected to under-perform the Apple. In addition to that, PENINSULA ENERG is 5.69 times more volatile than Apple Inc. It trades about -0.04 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.25 per unit of volatility. If you would invest  19,858  in Apple Inc on September 18, 2024 and sell it today you would earn a total of  4,027  from holding Apple Inc or generate 20.28% return on investment over 90 days.

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

PENINSULA ENERG  vs.  Apple Inc

PENINSULA ENERG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PENINSULA ENERG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Apple Inc

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PENINSULA ENERG and Apple

The main advantage of trading using opposite PENINSULA ENERG and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENINSULA ENERG 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 PENINSULA ENERG 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.