Correlation Between Apple and Wilmington Capital

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

Diversification Opportunities for Apple and Wilmington Capital

-0.71

Correlation Coefficient

Apple  Wilmington Capital

Pay attention - limited upside

The 3 months correlation between Apple and Wilmington is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Wilmington Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Capital 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 Wilmington Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Capital has no effect on the direction of Apple i.e., Apple and Wilmington Capital go up and down completely randomly.

Pair Corralation between Apple and Wilmington Capital

Assuming the 90 days trading horizon Apple Inc CDR is expected to generate 0.46 times more return on investment than Wilmington Capital. However, Apple Inc CDR is 2.18 times less risky than Wilmington Capital. It trades about 0.17 of its potential returns per unit of risk. Wilmington Capital Management is currently generating about -0.06 per unit of risk. If you would invest  3,324  in Apple Inc CDR on September 21, 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	Weak
Accuracy	98.44%
Values	Daily Returns

Apple Inc CDR  vs.  Wilmington Capital Management

Apple Inc CDR

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc CDR are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Wilmington Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilmington Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Apple and Wilmington Capital

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

The idea behind Apple Inc CDR and Wilmington Capital Management 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.