This module allows you to analyze existing cross correlation between Apple and HP. You can compare the effects of market volatilities on Apple and HP 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 HP. See also your portfolio center. Please also check ongoing floating volatility patterns of Apple and HP.
Given the investment horizon of 30 days, Apple is expected to generate 0.99 times more return on investment than HP. However, Apple is 1.01 times less risky than HP. It trades about -0.13 of its potential returns per unit of risk. HP is currently generating about -0.14 per unit of risk. If you would invest 17,897 in Apple on March 26, 2018 and sell it today you would lose (1,532) from holding Apple or give up 8.56% of portfolio value over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and HP Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on HP 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 are associated (or correlated) with HP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HP has no effect on the direction of Apple i.e. Apple and HP go up and down completely randomly.
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