Correlation Between Apple and Ligand Pharms
Can any of the company-specific risk be diversified away by investing in both Apple and Ligand Pharms 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 Ligand Pharms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Ligand Pharms Glucagon, you can compare the effects of market volatilities on Apple and Ligand Pharms 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 Ligand Pharms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Ligand Pharms.
Diversification Opportunities for Apple and Ligand Pharms
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apple and Ligand is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Ligand Pharms Glucagon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ligand Pharms Glucagon 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 Ligand Pharms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ligand Pharms Glucagon has no effect on the direction of Apple i.e., Apple and Ligand Pharms go up and down completely randomly.
Pair Corralation between Apple and Ligand Pharms
Given the investment horizon of 90 days Apple Inc is expected to under-perform the Ligand Pharms. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 28.12 times less risky than Ligand Pharms. The stock trades about -0.01 of its potential returns per unit of risk. The Ligand Pharms Glucagon is currently generating about 0.71 of returns per unit of risk over similar time horizon. If you would invest 0.19 in Ligand Pharms Glucagon on January 26, 2024 and sell it today you would earn a total of 0.11 from holding Ligand Pharms Glucagon or generate 57.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 9.52% |
| Values | Daily Returns |
Apple Inc vs. Ligand Pharms Glucagon
Performance |
| Timeline |
| Apple Inc |
| Ligand Pharms Glucagon |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Apple and Ligand Pharms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Ligand Pharms
The main advantage of trading using opposite Apple and Ligand Pharms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Ligand Pharms 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 Ligand Pharms will offset losses from the drop in Ligand Pharms' long position.The idea behind Apple Inc and Ligand Pharms Glucagon 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.| Ligand Pharms vs. Niagara Mohawk Power | Ligand Pharms vs. The Siam Cement | Ligand Pharms vs. Oaktree Capital Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |