Correlation Between Apple and I 80

Can any of the company-specific risk be diversified away by investing in both Apple and I 80 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 I 80 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 i 80 Gold Corp, you can compare the effects of market volatilities on Apple and I 80 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 I 80. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and I 80.

Diversification Opportunities for Apple and I 80

-0.57

Correlation Coefficient

Apple  I 80

Excellent diversification

The 3 months correlation between Apple and IAU is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and i 80 Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on i 80 Gold 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 I 80. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of i 80 Gold has no effect on the direction of Apple i.e., Apple and I 80 go up and down completely randomly.

Pair Corralation between Apple and I 80

Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 0.12 times more return on investment than I 80. However, Apple Inc CDR is 8.66 times less risky than I 80. It trades about 0.18 of its potential returns per unit of risk. i 80 Gold Corp is currently generating about -0.06 per unit of risk. If you would invest  3,338  in Apple Inc CDR on September 26, 2024 and sell it today you would earn a total of  443.00  from holding Apple Inc CDR or generate 13.27% 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.  i 80 Gold Corp

Apple Inc CDR

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc CDR are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Apple exhibited solid returns over the last few months and may actually be approaching a breakup point.

i 80 Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days i 80 Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Apple and I 80

The main advantage of trading using opposite Apple and I 80 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, I 80 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 I 80 will offset losses from the drop in I 80's long position.

The idea behind Apple Inc CDR and i 80 Gold Corp 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.