Correlation Between WD-40 CO and Apple

Can any of the company-specific risk be diversified away by investing in both WD-40 CO 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 WD-40 CO and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WD 40 CO and Apple Inc, you can compare the effects of market volatilities on WD-40 CO 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 WD-40 CO with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of WD-40 CO and Apple.

Diversification Opportunities for WD-40 CO and Apple

0.49

Correlation Coefficient

WD-40 CO  Apple

Very weak diversification

The 3 months correlation between WD-40 and Apple is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding WD 40 CO and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and WD-40 CO 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 WD 40 CO 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 WD-40 CO i.e., WD-40 CO and Apple go up and down completely randomly.

Pair Corralation between WD-40 CO and Apple

Assuming the 90 days trading horizon WD 40 CO is expected to generate 1.17 times more return on investment than Apple. However, WD-40 CO is 1.17 times more volatile than Apple Inc. It trades about -0.08 of its potential returns per unit of risk. Apple Inc is currently generating about -0.18 per unit of risk. If you would invest  24,695  in WD 40 CO on December 20, 2024 and sell it today you would lose (2,695) from holding WD 40 CO or give up 10.91% of portfolio value over 90 days.

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

WD 40 CO  vs.  Apple Inc

WD 40 CO

Risk-Adjusted Performance

Very Weak

Over the last 90 days WD 40 CO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with WD-40 CO and Apple

The main advantage of trading using opposite WD-40 CO and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WD-40 CO 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 WD 40 CO 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.