Correlation Between MIRAMAR HOTEL and Apple

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

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

Diversification Opportunities for MIRAMAR HOTEL and Apple

0.53

Correlation Coefficient

MIRAMAR HOTEL  Apple

Very weak diversification

The 3 months correlation between MIRAMAR and Apple is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and MIRAMAR HOTEL 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 MIRAMAR HOTEL INV 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 MIRAMAR HOTEL i.e., MIRAMAR HOTEL and Apple go up and down completely randomly.

Pair Corralation between MIRAMAR HOTEL and Apple

Assuming the 90 days trading horizon MIRAMAR HOTEL INV is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, MIRAMAR HOTEL INV is 1.29 times less risky than Apple. The stock trades about -0.06 of its potential returns per unit of risk. The Apple Inc is currently generating about 0.62 of returns per unit of risk over similar time horizon. If you would invest  21,125  in Apple Inc on September 13, 2024 and sell it today you would earn a total of  2,485  from holding Apple Inc or generate 11.76% return on investment over 90 days.

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

MIRAMAR HOTEL INV  vs.  Apple Inc

MIRAMAR HOTEL INV

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MIRAMAR HOTEL INV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, MIRAMAR HOTEL exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 rather fragile fundamental indicators, Apple exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MIRAMAR HOTEL and Apple

The main advantage of trading using opposite MIRAMAR HOTEL and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIRAMAR HOTEL 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 MIRAMAR HOTEL INV 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.