Correlation Between Apple and BLUERUSH Media

Can any of the company-specific risk be diversified away by investing in both Apple and BLUERUSH Media 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 BLUERUSH Media 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 BLUERUSH Media Group, you can compare the effects of market volatilities on Apple and BLUERUSH Media 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 BLUERUSH Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and BLUERUSH Media.

Diversification Opportunities for Apple and BLUERUSH Media

-0.34

Correlation Coefficient

Apple  BLUERUSH Media

Very good diversification

The 3 months correlation between Apple and BLUERUSH is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and BLUERUSH Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLUERUSH Media Group 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 BLUERUSH Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLUERUSH Media Group has no effect on the direction of Apple i.e., Apple and BLUERUSH Media go up and down completely randomly.

Pair Corralation between Apple and BLUERUSH Media

Assuming the 90 days trading horizon Apple is expected to generate 17.46 times less return on investment than BLUERUSH Media. But when comparing it to its historical volatility, Apple Inc CDR is 22.02 times less risky than BLUERUSH Media. It trades about 0.12 of its potential returns per unit of risk. BLUERUSH Media Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1.00  in BLUERUSH Media Group on September 20, 2024 and sell it today you would earn a total of  0.00  from holding BLUERUSH Media Group or generate 0.0% return on investment over 90 days.

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

Apple Inc CDR  vs.  BLUERUSH Media Group

Apple Inc CDR

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc CDR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BLUERUSH Media Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BLUERUSH Media Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, BLUERUSH Media showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and BLUERUSH Media

The main advantage of trading using opposite Apple and BLUERUSH Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, BLUERUSH Media 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 BLUERUSH Media will offset losses from the drop in BLUERUSH Media's long position.

The idea behind Apple Inc CDR and BLUERUSH Media Group 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.