Correlation Between Harman International and Apple

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Can any of the company-specific risk be diversified away by investing in both Harman International 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 Harman International and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harman International Industries and Apple Inc, you can compare the effects of market volatilities on Harman International 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 Harman International with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harman International and Apple.

Diversification Opportunities for Harman International and Apple

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Harman and Apple is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Harman International Industrie and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Harman International 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 Harman International Industries 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 Harman International i.e., Harman International and Apple go up and down completely randomly.

Pair Corralation between Harman International and Apple

If you would invest (100.00) in Harman International Industries on December 29, 2023 and sell it today you would earn a total of  100.00  from holding Harman International Industries or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Harman International Industrie  vs.  Apple Inc

 Performance 
       Timeline  
Harman International 

Risk-Adjusted Performance

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Over the last 90 days Harman International Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Harman International is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.
Apple Inc 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Harman International and Apple Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Harman International and Apple

The main advantage of trading using opposite Harman International and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harman International 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 Harman International Industries 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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