Correlation Between Apple and Amotiv
Can any of the company-specific risk be diversified away by investing in both Apple and Amotiv 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 Apple and Amotiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc CDR and Amotiv Limited, you can compare the effects of market volatilities on Apple and Amotiv 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 Apple with a short position of Amotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Amotiv.
Diversification Opportunities for Apple and Amotiv
Very good diversification
The 3 months correlation between Apple and Amotiv is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Amotiv Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amotiv Limited and Apple 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 Apple Inc CDR are associated (or correlated) with Amotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amotiv Limited has no effect on the direction of Apple i.e., Apple and Amotiv go up and down completely randomly.
Pair Corralation between Apple and Amotiv
Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 0.48 times more return on investment than Amotiv. However, Apple Inc CDR is 2.1 times less risky than Amotiv. It trades about 0.24 of its potential returns per unit of risk. Amotiv Limited is currently generating about -0.08 per unit of risk. If you would invest 3,382 in Apple Inc CDR on September 24, 2024 and sell it today you would earn a total of 349.00 from holding Apple Inc CDR or generate 10.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Apple Inc CDR vs. Amotiv Limited
Performance |
Timeline |
Apple Inc CDR |
Amotiv Limited |
Apple and Amotiv Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apple and Amotiv
The main advantage of trading using opposite Apple and Amotiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Amotiv 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 Amotiv will offset losses from the drop in Amotiv's long position.Apple vs. iShares Canadian HYBrid | Apple vs. Altagas Cum Red | Apple vs. European Residential Real | Apple vs. iShares Fundamental Hedged |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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