Correlation Between Alkane Resources and Apple
Can any of the company-specific risk be diversified away by investing in both Alkane Resources 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 Alkane Resources and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alkane Resources Limited and Apple Inc, you can compare the effects of market volatilities on Alkane Resources 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 Alkane Resources with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkane Resources and Apple.
Diversification Opportunities for Alkane Resources and Apple
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alkane and Apple is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Alkane Resources Limited and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Alkane Resources 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 Alkane Resources Limited 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 Alkane Resources i.e., Alkane Resources and Apple go up and down completely randomly.
Pair Corralation between Alkane Resources and Apple
Assuming the 90 days horizon Alkane Resources Limited is expected to generate 2.59 times more return on investment than Apple. However, Alkane Resources is 2.59 times more volatile than Apple Inc. It trades about 0.19 of its potential returns per unit of risk. Apple Inc is currently generating about -0.01 per unit of risk. If you would invest 40.00 in Alkane Resources Limited on January 17, 2024 and sell it today you would earn a total of 7.00 from holding Alkane Resources Limited or generate 17.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Alkane Resources Limited vs. Apple Inc
Performance |
| Timeline |
| Alkane Resources |
| Apple Inc |
Alkane Resources and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alkane Resources and Apple
The main advantage of trading using opposite Alkane Resources and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkane Resources 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.| Alkane Resources vs. Aurion Resources | Alkane Resources vs. Liberty Gold Corp | Alkane Resources vs. Orezone Gold Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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