Correlation Between Werner Enterprises and Apple

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

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

Diversification Opportunities for Werner Enterprises and Apple

0.28

Correlation Coefficient

Werner Enterprises  Apple

Modest diversification

The 3 months correlation between Werner and Apple is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Werner Enterprises and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Werner Enterprises 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 Werner Enterprises 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 Werner Enterprises i.e., Werner Enterprises and Apple go up and down completely randomly.

Pair Corralation between Werner Enterprises and Apple

Assuming the 90 days trading horizon Werner Enterprises is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, Werner Enterprises is 1.11 times less risky than Apple. The stock trades about -0.24 of its potential returns per unit of risk. The Apple Inc is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest  24,194  in Apple Inc on December 20, 2024 and sell it today you would lose (4,510) from holding Apple Inc or give up 18.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Werner Enterprises  vs.  Apple Inc

Werner Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Werner Enterprises 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 basic 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.

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 Werner Enterprises and Apple

The main advantage of trading using opposite Werner Enterprises and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Werner Enterprises 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 Werner Enterprises 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.

Check out your portfolio center.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.