Correlation Between Apple and Tristar Gold

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

Diversification Opportunities for Apple and Tristar Gold

-0.4

Correlation Coefficient

Apple  Tristar Gold

Very good diversification

The 3 months correlation between Apple and Tristar is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Tristar Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tristar 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 Tristar Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tristar Gold has no effect on the direction of Apple i.e., Apple and Tristar Gold go up and down completely randomly.

Pair Corralation between Apple and Tristar Gold

Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 0.13 times more return on investment than Tristar Gold. However, Apple Inc CDR is 7.78 times less risky than Tristar Gold. It trades about 0.16 of its potential returns per unit of risk. Tristar Gold is currently generating about -0.05 per unit of risk. If you would invest  3,324  in Apple Inc CDR on September 23, 2024 and sell it today you would earn a total of  407.00  from holding Apple Inc CDR or generate 12.24% 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.  Tristar Gold

Apple Inc CDR

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc CDR are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tristar Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tristar Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Apple and Tristar Gold

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

The idea behind Apple Inc CDR and Tristar Gold 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.