Correlation Between Atea ASA and Apple
Can any of the company-specific risk be diversified away by investing in both Atea ASA 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 Atea ASA and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atea ASA and Apple Inc, you can compare the effects of market volatilities on Atea ASA 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 Atea ASA with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atea ASA and Apple.
Diversification Opportunities for Atea ASA and Apple
Very poor diversification
The 3 months correlation between Atea and Apple is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Atea ASA and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Atea ASA 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 Atea ASA 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 has no effect on the direction of Atea ASA i.e., Atea ASA and Apple go up and down completely randomly.
Pair Corralation between Atea ASA and Apple
Assuming the 90 days trading horizon Atea ASA is expected to generate 2.99 times more return on investment than Apple. However, Atea ASA is 2.99 times more volatile than Apple Inc. It trades about 0.11 of its potential returns per unit of risk. Apple Inc is currently generating about 0.16 per unit of risk. If you would invest 586.00 in Atea ASA on September 24, 2024 and sell it today you would earn a total of 558.00 from holding Atea ASA or generate 95.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Atea ASA vs. Apple Inc
Performance |
Timeline |
Atea ASA |
Apple Inc |
Atea ASA and Apple Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Atea ASA and Apple
The main advantage of trading using opposite Atea ASA and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atea ASA 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 Atea ASA and Apple Inc 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.Apple vs. COMBA TELECOM SYST | Apple vs. Spirent Communications plc | Apple vs. MARKET VECTR RETAIL | Apple vs. CITIC Telecom International |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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