Correlation Between Apple and Oculus VisionTech

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Apple and Oculus VisionTech 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 Oculus VisionTech 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 Oculus VisionTech, you can compare the effects of market volatilities on Apple and Oculus VisionTech 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 Oculus VisionTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Oculus VisionTech.

Diversification Opportunities for Apple and Oculus VisionTech

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Apple and Oculus is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Oculus VisionTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oculus VisionTech 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 Oculus VisionTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oculus VisionTech has no effect on the direction of Apple i.e., Apple and Oculus VisionTech go up and down completely randomly.

Pair Corralation between Apple and Oculus VisionTech

Assuming the 90 days trading horizon Apple is expected to generate 1.85 times less return on investment than Oculus VisionTech. But when comparing it to its historical volatility, Apple Inc CDR is 2.94 times less risky than Oculus VisionTech. It trades about 0.14 of its potential returns per unit of risk. Oculus VisionTech is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  6.00  in Oculus VisionTech on September 13, 2024 and sell it today you would earn a total of  1.00  from holding Oculus VisionTech or generate 16.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Apple Inc CDR  vs.  Oculus VisionTech

 Performance 
       Timeline  
Apple Inc CDR 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc CDR are ranked lower than 10 (%) 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.
Oculus VisionTech 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Oculus VisionTech are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Oculus VisionTech showed solid returns over the last few months and may actually be approaching a breakup point.

Apple and Oculus VisionTech Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apple and Oculus VisionTech

The main advantage of trading using opposite Apple and Oculus VisionTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Oculus VisionTech 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 Oculus VisionTech will offset losses from the drop in Oculus VisionTech's long position.
The idea behind Apple Inc CDR and Oculus VisionTech 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

Other Complementary Tools

Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Equity Valuation
Check real value of public entities based on technical and fundamental data
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine