Correlation Between Apple and BROOKFBH 462

Can any of the company-specific risk be diversified away by investing in both Apple and BROOKFBH 462 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 BROOKFBH 462 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apple Inc and BROOKFBH 462 PRSNU, you can compare the effects of market volatilities on Apple and BROOKFBH 462 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 BROOKFBH 462. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and BROOKFBH 462.

Diversification Opportunities for Apple and BROOKFBH 462

0.67

Correlation Coefficient

Apple  BROOKFBH 462

Poor diversification

The 3 months correlation between Apple and BROOKFBH is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and BROOKFBH 462 PRSNU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROOKFBH 462 PRSNU 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 BROOKFBH 462. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROOKFBH 462 PRSNU has no effect on the direction of Apple i.e., Apple and BROOKFBH 462 go up and down completely randomly.

Pair Corralation between Apple and BROOKFBH 462

Assuming the 90 days trading horizon Apple is expected to generate 1.02 times less return on investment than BROOKFBH 462. But when comparing it to its historical volatility, Apple Inc is 2.17 times less risky than BROOKFBH 462. It trades about 0.17 of its potential returns per unit of risk. BROOKFBH 462 PRSNU is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,369  in BROOKFBH 462 PRSNU on September 5, 2024 and sell it today you would earn a total of  134.00  from holding BROOKFBH 462 PRSNU or generate 9.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	78.13%
Values	Daily Returns

Apple Inc  vs.  BROOKFBH 462 PRSNU

Apple Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Apple displayed solid returns over the last few months and may actually be approaching a breakup point.

BROOKFBH 462 PRSNU

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BROOKFBH 462 PRSNU are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, BROOKFBH 462 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and BROOKFBH 462

The main advantage of trading using opposite Apple and BROOKFBH 462 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, BROOKFBH 462 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 BROOKFBH 462 will offset losses from the drop in BROOKFBH 462's long position.

The idea behind Apple Inc and BROOKFBH 462 PRSNU 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 CEOs Directory module to screen CEOs from public companies around the world.