Correlation Between Young Cos and Apple

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

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

Diversification Opportunities for Young Cos and Apple

0.41

Correlation Coefficient

Young Cos  Apple

Very weak diversification

The 3 months correlation between Young and Apple is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Young Cos Brewery and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Young Cos 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 Young Cos Brewery 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 Young Cos i.e., Young Cos and Apple go up and down completely randomly.

Pair Corralation between Young Cos and Apple

Assuming the 90 days trading horizon Young Cos Brewery is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, Young Cos Brewery is 1.65 times less risky than Apple. The stock trades about -0.18 of its potential returns per unit of risk. The Apple Inc is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  26,200  in Apple Inc on October 12, 2024 and sell it today you would lose (1,950) from holding Apple Inc or give up 7.44% of portfolio value over 90 days.

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

Young Cos Brewery  vs.  Apple Inc

Young Cos Brewery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Young Cos Brewery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Young Cos is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Apple Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Young Cos and Apple

The main advantage of trading using opposite Young Cos and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Cos 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 Young Cos Brewery 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.