Correlation Between Everspin Technologies and APPLE

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

By analyzing existing cross correlation between Everspin Technologies and APPLE INC 3, you can compare the effects of market volatilities on Everspin Technologies 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 Everspin Technologies with a short position of APPLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everspin Technologies and APPLE.

Diversification Opportunities for Everspin Technologies and APPLE

-0.61

Correlation Coefficient

Everspin Technologies  APPLE

Excellent diversification

The 3 months correlation between Everspin and APPLE is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Everspin Technologies and APPLE INC 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLE INC 3 and Everspin Technologies 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 Everspin Technologies 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 3 has no effect on the direction of Everspin Technologies i.e., Everspin Technologies and APPLE go up and down completely randomly.

Pair Corralation between Everspin Technologies and APPLE

Given the investment horizon of 90 days Everspin Technologies is expected to generate 5.48 times more return on investment than APPLE. However, Everspin Technologies is 5.48 times more volatile than APPLE INC 3. It trades about 0.11 of its potential returns per unit of risk. APPLE INC 3 is currently generating about -0.04 per unit of risk. If you would invest  543.00  in Everspin Technologies on September 12, 2024 and sell it today you would earn a total of  104.00  from holding Everspin Technologies or generate 19.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Everspin Technologies  vs.  APPLE INC 3

Everspin Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Everspin Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Everspin Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

APPLE INC 3

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days APPLE INC 3 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, APPLE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Everspin Technologies and APPLE

The main advantage of trading using opposite Everspin Technologies and APPLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everspin Technologies 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 Everspin Technologies and APPLE INC 3 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.