This module allows you to analyze existing cross correlation between Apple and International Business Machines Corporation. You can compare the effects of market volatilities on Apple and International Business 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 International Business. See also your portfolio center. Please also check ongoing floating volatility patterns of Apple and International Business.
Given the investment horizon of 30 days, Apple is expected to under-perform the International Business. But the stock apears to be less risky and, when comparing its historical volatility, Apple is 1.15 times less risky than International Business. The stock trades about -0.13 of its potential returns per unit of risk. The International Business Machines Corporation is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 15,858 in International Business Machines Corporation on March 27, 2018 and sell it today you would lose (1,264) from holding International Business Machines Corporation or give up 7.97% of portfolio value over 30 days.
Pair Corralation between Apple and International Business
Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and International Business Machine in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Apple i.e. Apple and International Business go up and down completely randomly.
Build portfolios using Macroaxis predefined set of investing ideas. Many of Macroaxis investing ideas can easily outperform a given market. Ideas can also be optimized per your risk profile before portfolio origination is invoked.