This module allows you to analyze existing cross correlation between Apple and NZSE. You can compare the effects of market volatilities on Apple and NZSE 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 NZSE. See also your portfolio center. Please also check ongoing floating volatility patterns of Apple and NZSE.
|Horizon||30 Days Login to change|
Predicted Return Density
Apple Inc vs. NZSE
Given the investment horizon of 30 days, Apple is expected to generate 2.38 times more return on investment than NZSE. However, Apple is 2.38 times more volatile than NZSE. It trades about 0.28 of its potential returns per unit of risk. NZSE is currently generating about 0.33 per unit of risk. If you would invest 17,966 in Apple on June 22, 2019 and sell it today you would earn a total of 2,756 from holding Apple or generate 15.34% return on investment over 30 days.
Pair Corralation between Apple and NZSE
|Time Period||2 Months [change]|
Diversification Opportunities for Apple and NZSE
Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and NZSE in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on NZSE 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 are associated (or correlated) with NZSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NZSE has no effect on the direction of Apple i.e. Apple and NZSE go up and down completely randomly.
See also your portfolio center. Please also try Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.