Correlation Between Apple and Yunhong Green

Can any of the company-specific risk be diversified away by investing in both Apple and Yunhong Green 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 Yunhong Green into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apple Inc and Yunhong Green CTI, you can compare the effects of market volatilities on Apple and Yunhong Green 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 Yunhong Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Yunhong Green.

Diversification Opportunities for Apple and Yunhong Green

-0.66

Correlation Coefficient

Apple  Yunhong Green

Excellent diversification

The 3 months correlation between Apple and Yunhong is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Yunhong Green CTI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunhong Green CTI 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 Yunhong Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunhong Green CTI has no effect on the direction of Apple i.e., Apple and Yunhong Green go up and down completely randomly.

Pair Corralation between Apple and Yunhong Green

Assuming the 90 days trading horizon Apple is expected to generate 1.01 times less return on investment than Yunhong Green. But when comparing it to its historical volatility, Apple Inc is 2.7 times less risky than Yunhong Green. It trades about 0.33 of its potential returns per unit of risk. Yunhong Green CTI is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  114.00  in Yunhong Green CTI on March 16, 2024 and sell it today you would earn a total of  14.00  from holding Yunhong Green CTI or generate 12.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Apple Inc  vs.  Yunhong Green CTI

Apple Inc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.

Yunhong Green CTI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yunhong Green CTI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Apple and Yunhong Green

The main advantage of trading using opposite Apple and Yunhong Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Yunhong Green 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 Yunhong Green will offset losses from the drop in Yunhong Green's long position.

The idea behind Apple Inc and Yunhong Green CTI 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.