Correlation Between Apple and CONICO

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

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

Diversification Opportunities for Apple and CONICO

0.13

Correlation Coefficient

Apple  CONICO

Average diversification

The 3 months correlation between Apple and CONICO is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and CONICO LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONICO LTD 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 CONICO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONICO LTD has no effect on the direction of Apple i.e., Apple and CONICO go up and down completely randomly.

Pair Corralation between Apple and CONICO

Assuming the 90 days trading horizon Apple is expected to generate 55.6 times less return on investment than CONICO. But when comparing it to its historical volatility, Apple Inc is 94.49 times less risky than CONICO. It trades about 0.27 of its potential returns per unit of risk. CONICO LTD is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.20  in CONICO LTD on September 26, 2024 and sell it today you would earn a total of  0.34  from holding CONICO LTD or generate 170.0% return on investment over 90 days.

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

Apple Inc  vs.  CONICO LTD

Apple Inc

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 21 (%) 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.

CONICO LTD

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CONICO LTD are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CONICO reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and CONICO

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

The idea behind Apple Inc and CONICO LTD 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.