Correlation Between Winsome Resources and Apple

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

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

Diversification Opportunities for Winsome Resources and Apple

-0.18

Correlation Coefficient

Winsome Resources  Apple

Good diversification

The 3 months correlation between Winsome and Apple is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Winsome Resources Limited and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Winsome Resources 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 Winsome Resources Limited 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 Winsome Resources i.e., Winsome Resources and Apple go up and down completely randomly.

Pair Corralation between Winsome Resources and Apple

Assuming the 90 days horizon Winsome Resources Limited is expected to under-perform the Apple. In addition to that, Winsome Resources is 5.86 times more volatile than Apple Inc. It trades about -0.02 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.09 per unit of volatility. If you would invest  22,253  in Apple Inc on September 3, 2024 and sell it today you would earn a total of  1,480  from holding Apple Inc or generate 6.65% return on investment over 90 days.

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

Winsome Resources Limited  vs.  Apple Inc

Winsome Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Winsome Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Apple Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Winsome Resources and Apple

The main advantage of trading using opposite Winsome Resources and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winsome Resources 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 Winsome Resources Limited 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.