Correlation Between Apple and Gartner
Can any of the company-specific risk be diversified away by investing in both Apple and Gartner 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 Apple and Gartner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Gartner, you can compare the effects of market volatilities on Apple and Gartner 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 Gartner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Gartner.
Diversification Opportunities for Apple and Gartner
Very good diversification
The 3 months correlation between Apple and Gartner is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Gartner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gartner 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 Inc are associated (or correlated) with Gartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gartner has no effect on the direction of Apple i.e., Apple and Gartner go up and down completely randomly.
Pair Corralation between Apple and Gartner
Given the investment horizon of 90 days Apple is expected to generate 3.81 times less return on investment than Gartner. But when comparing it to its historical volatility, Apple Inc is 1.03 times less risky than Gartner. It trades about 0.02 of its potential returns per unit of risk. Gartner is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 29,004 in Gartner on January 20, 2024 and sell it today you would earn a total of 15,034 from holding Gartner or generate 51.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Gartner
Performance |
| Timeline |
| Apple Inc |
| Gartner |
Apple and Gartner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Gartner
The main advantage of trading using opposite Apple and Gartner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Gartner 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 Gartner will offset losses from the drop in Gartner's long position.The idea behind Apple Inc and Gartner 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.| Gartner vs. Information Services Group | Gartner vs. Home Bancorp | Gartner vs. CRA International | Gartner vs. Aquagold 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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