Correlation Between Apple and ABERFORTH SMCOS

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

By analyzing existing cross correlation between Apple Inc and ABERFORTH SMCOS TRLS 01, you can compare the effects of market volatilities on Apple and ABERFORTH SMCOS 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 ABERFORTH SMCOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and ABERFORTH SMCOS.

Diversification Opportunities for Apple and ABERFORTH SMCOS

-0.64

Correlation Coefficient

Apple  ABERFORTH SMCOS

Excellent diversification

The 3 months correlation between Apple and ABERFORTH is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ABERFORTH SMCOS TRLS 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABERFORTH SMCOS TRLS 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 ABERFORTH SMCOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABERFORTH SMCOS TRLS has no effect on the direction of Apple i.e., Apple and ABERFORTH SMCOS go up and down completely randomly.

Pair Corralation between Apple and ABERFORTH SMCOS

Assuming the 90 days trading horizon Apple Inc is expected to generate 1.39 times more return on investment than ABERFORTH SMCOS. However, Apple is 1.39 times more volatile than ABERFORTH SMCOS TRLS 01. It trades about 0.07 of its potential returns per unit of risk. ABERFORTH SMCOS TRLS 01 is currently generating about 0.07 per unit of risk. If you would invest  17,765  in Apple Inc on September 5, 2024 and sell it today you would earn a total of  5,195  from holding Apple Inc or generate 29.24% 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.  ABERFORTH SMCOS TRLS 01

Apple Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Apple exhibited solid returns over the last few months and may actually be approaching a breakup point.

ABERFORTH SMCOS TRLS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABERFORTH SMCOS TRLS 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ABERFORTH SMCOS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Apple and ABERFORTH SMCOS

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

The idea behind Apple Inc and ABERFORTH SMCOS TRLS 01 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.