Correlation Between Union Pacific and Apple
Can any of the company-specific risk be diversified away by investing in both Union Pacific 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 Union Pacific and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Pacific and Apple Inc, you can compare the effects of market volatilities on Union Pacific 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 Union Pacific with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Pacific and Apple.
Diversification Opportunities for Union Pacific and Apple
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Union and Apple is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Union Pacific and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Union Pacific 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 Union Pacific 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 Union Pacific i.e., Union Pacific and Apple go up and down completely randomly.
Pair Corralation between Union Pacific and Apple
Considering the 90-day investment horizon Union Pacific is expected to generate 1.32 times less return on investment than Apple. But when comparing it to its historical volatility, Union Pacific is 1.17 times less risky than Apple. It trades about 0.01 of its potential returns per unit of risk. Apple Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 15,618 in Apple Inc on January 20, 2024 and sell it today you would earn a total of 882.00 from holding Apple Inc or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Pacific vs. Apple Inc
Performance |
| Timeline |
| Union Pacific |
| Apple Inc |
Union Pacific and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Pacific and Apple
The main advantage of trading using opposite Union Pacific and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Pacific 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.| Union Pacific vs. Norfolk Southern | Union Pacific vs. CSX Corporation | Union Pacific vs. United Parcel Service | Union Pacific vs. Canadian National Railway |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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