Correlation Between Apple and Nib Holdings

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

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

Diversification Opportunities for Apple and Nib Holdings

-0.64

Correlation Coefficient

Apple  Nib Holdings

Excellent diversification

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

Pair Corralation between Apple and Nib Holdings

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.34 times more return on investment than Nib Holdings. However, Apple Inc is 2.9 times less risky than Nib Holdings. It trades about 0.27 of its potential returns per unit of risk. nib holdings limited is currently generating about -0.12 per unit of risk. If you would invest  21,325  in Apple Inc on September 23, 2024 and sell it today you would earn a total of  2,895  from holding Apple Inc or generate 13.58% 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.  nib holdings limited

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. In spite of comparatively fragile fundamental indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.

nib holdings limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days nib holdings limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Apple and Nib Holdings

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

The idea behind Apple Inc and nib holdings limited 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.