Correlation Between Hampton Financial and Apple

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

By analyzing existing cross correlation between Hampton Financial Corp and Apple Inc CDR, you can compare the effects of market volatilities on Hampton Financial and Apple 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 Hampton Financial with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hampton Financial and Apple.

Diversification Opportunities for Hampton Financial and Apple

-0.05

Correlation Coefficient

Hampton Financial  Apple

Good diversification

The 3 months correlation between Hampton and Apple is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hampton Financial Corp and Apple Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc CDR and Hampton Financial 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 Hampton Financial Corp are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc CDR has no effect on the direction of Hampton Financial i.e., Hampton Financial and Apple go up and down completely randomly.

Pair Corralation between Hampton Financial and Apple

Assuming the 90 days horizon Hampton Financial is expected to generate 3.76 times less return on investment than Apple. In addition to that, Hampton Financial is 1.74 times more volatile than Apple Inc CDR. It trades about 0.03 of its total potential returns per unit of risk. Apple Inc CDR is currently generating about 0.18 per unit of volatility. If you would invest  3,338  in Apple Inc CDR on September 26, 2024 and sell it today you would earn a total of  443.00  from holding Apple Inc CDR or generate 13.27% return on investment over 90 days.

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

Hampton Financial Corp  vs.  Apple Inc CDR

Hampton Financial Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hampton Financial Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Hampton Financial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Apple Inc CDR

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc CDR are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Apple exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hampton Financial and Apple

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

The idea behind Hampton Financial Corp and Apple Inc CDR 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.