Correlation Between IShares SP and Apple
Can any of the company-specific risk be diversified away by investing in both IShares SP 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 IShares SP and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SP 500 and Apple Inc, you can compare the effects of market volatilities on IShares SP 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 IShares SP with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and Apple.
Diversification Opportunities for IShares SP and Apple
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and Apple is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 500 and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and IShares SP 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 iShares SP 500 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 IShares SP i.e., IShares SP and Apple go up and down completely randomly.
Pair Corralation between IShares SP and Apple
Considering the 90-day investment horizon iShares SP 500 is expected to generate 0.42 times more return on investment than Apple. However, iShares SP 500 is 2.38 times less risky than Apple. It trades about -0.2 of its potential returns per unit of risk. Apple Inc is currently generating about -0.14 per unit of risk. If you would invest 18,237 in iShares SP 500 on January 19, 2024 and sell it today you would lose (546.00) from holding iShares SP 500 or give up 2.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SP 500 vs. Apple Inc
Performance |
| Timeline |
| iShares SP 500 |
| Apple Inc |
IShares SP and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and Apple
The main advantage of trading using opposite IShares SP and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP 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.| IShares SP vs. iShares SP 500 | IShares SP vs. iShares SP Mid Cap | IShares SP vs. iShares SP Small Cap | IShares SP vs. iShares SP Mid Cap |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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