Correlation Between Apple and Recrusul

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

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

Diversification Opportunities for Apple and Recrusul

0.2

Correlation Coefficient

Apple  Recrusul

Modest diversification

The 3 months correlation between Apple and Recrusul is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Recrusul SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recrusul SA 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 Recrusul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recrusul SA has no effect on the direction of Apple i.e., Apple and Recrusul go up and down completely randomly.

Pair Corralation between Apple and Recrusul

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.17 times more return on investment than Recrusul. However, Apple Inc is 5.88 times less risky than Recrusul. It trades about 0.33 of its potential returns per unit of risk. Recrusul SA is currently generating about -0.04 per unit of risk. If you would invest  6,541  in Apple Inc on September 23, 2024 and sell it today you would earn a total of  1,196  from holding Apple Inc or generate 18.28% return on investment over 90 days.

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

Apple Inc  vs.  Recrusul SA

Apple Inc

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 19 (%) 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.

Recrusul SA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Recrusul SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Recrusul unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and Recrusul

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

The idea behind Apple Inc and Recrusul 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.