Correlation Between Apple and Guararapes Confeces

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

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

Diversification Opportunities for Apple and Guararapes Confeces

-0.77

Correlation Coefficient

Apple  Guararapes Confeces

Pay attention - limited upside

The 3 months correlation between Apple and Guararapes is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Guararapes Confeces SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guararapes Confeces 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 Guararapes Confeces. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guararapes Confeces has no effect on the direction of Apple i.e., Apple and Guararapes Confeces go up and down completely randomly.

Pair Corralation between Apple and Guararapes Confeces

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.31 times more return on investment than Guararapes Confeces. However, Apple Inc is 3.27 times less risky than Guararapes Confeces. It trades about 0.3 of its potential returns per unit of risk. Guararapes Confeces SA is currently generating about -0.07 per unit of risk. If you would invest  6,163  in Apple Inc on September 27, 2024 and sell it today you would earn a total of  1,747  from holding Apple Inc or generate 28.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Apple Inc  vs.  Guararapes Confeces SA

Apple Inc

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Apple sustained solid returns over the last few months and may actually be approaching a breakup point.

Guararapes Confeces

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guararapes Confeces SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Apple and Guararapes Confeces

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

The idea behind Apple Inc and Guararapes Confeces SA 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.