Correlation Between WEG SA and Apple

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

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

Diversification Opportunities for WEG SA and Apple

0.6

Correlation Coefficient

WEG SA  Apple

Poor diversification

The 3 months correlation between WEG and Apple is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding WEG SA and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and WEG SA 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 WEG SA 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 WEG SA i.e., WEG SA and Apple go up and down completely randomly.

Pair Corralation between WEG SA and Apple

Assuming the 90 days trading horizon WEG SA is expected to generate 1.09 times more return on investment than Apple. However, WEG SA is 1.09 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 -0.19 per unit of risk. If you would invest  5,326  in WEG SA on December 27, 2024 and sell it today you would lose (687.00) from holding WEG SA or give up 12.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

WEG SA  vs.  Apple Inc

WEG SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days WEG SA 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 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. Despite uncertain performance in the last few months, the Stock's basic 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 WEG SA and Apple

The main advantage of trading using opposite WEG SA and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEG SA 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 WEG SA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.