Correlation Between Apple and TravelCenters

Can any of the company-specific risk be diversified away by investing in both Apple and TravelCenters 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 TravelCenters into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apple Inc and TravelCenters Of America, you can compare the effects of market volatilities on Apple and TravelCenters 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 TravelCenters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and TravelCenters.

Diversification Opportunities for Apple and TravelCenters

0.0

Correlation Coefficient

Apple  TravelCenters

Pay attention - limited upside

The 3 months correlation between Apple and TravelCenters is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and TravelCenters Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TravelCenters Of America 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 are associated (or correlated) with TravelCenters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TravelCenters Of America has no effect on the direction of Apple i.e., Apple and TravelCenters go up and down completely randomly.

Pair Corralation between Apple and TravelCenters

If you would invest  21,655  in Apple Inc on September 17, 2024 and sell it today you would earn a total of  3,449  from holding Apple Inc or generate 15.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Apple Inc  vs.  TravelCenters Of America

Apple Inc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Apple disclosed solid returns over the last few months and may actually be approaching a breakup point.

TravelCenters Of America

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TravelCenters Of America has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, TravelCenters is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Apple and TravelCenters

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

The idea behind Apple Inc and TravelCenters Of America 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.