Correlation Between Anthem and Apple
Can any of the company-specific risk be diversified away by investing in both Anthem 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 Anthem and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anthem Inc and Apple Inc, you can compare the effects of market volatilities on Anthem 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 Anthem with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anthem and Apple.
Diversification Opportunities for Anthem and Apple
Very weak diversification
The 3 months correlation between Anthem and Apple is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Anthem Inc and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Anthem 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 Anthem Inc 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 Anthem i.e., Anthem and Apple go up and down completely randomly.
Pair Corralation between Anthem and Apple
Given the investment horizon of 90 days Anthem Inc is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, Anthem Inc is 1.01 times less risky than Apple. The stock trades about -0.04 of its potential returns per unit of risk. The Apple Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 15,587 in Apple Inc on January 19, 2024 and sell it today you would earn a total of 1,218 from holding Apple Inc or generate 7.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 8.28% |
| Values | Daily Returns |
Anthem Inc vs. Apple Inc
Performance |
| Timeline |
| Anthem Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Apple Inc |
Anthem and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anthem and Apple
The main advantage of trading using opposite Anthem and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anthem 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.| Anthem vs. Blue Hat Interactive | Anthem vs. Playtika Holding Corp | Anthem vs. GMS Inc | Anthem vs. Sharplink Gaming |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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