Correlation Between North Media and Apple
Can any of the company-specific risk be diversified away by investing in both North Media 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 North Media and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North Media AS and Apple Inc, you can compare the effects of market volatilities on North Media 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 North Media with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Media and Apple.
Diversification Opportunities for North Media and Apple
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between North and Apple is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding North Media AS and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and North Media 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 North Media AS 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 North Media i.e., North Media and Apple go up and down completely randomly.
Pair Corralation between North Media and Apple
Assuming the 90 days trading horizon North Media AS is expected to under-perform the Apple. In addition to that, North Media is 1.44 times more volatile than Apple Inc. It trades about -0.09 of its total potential returns per unit of risk. Apple Inc is currently generating about -0.01 per unit of volatility. If you would invest 16,971 in Apple Inc on January 26, 2024 and sell it today you would lose (69.00) from holding Apple Inc or give up 0.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 90.48% |
Values | Daily Returns |
North Media AS vs. Apple Inc
Performance |
Timeline |
North Media AS |
Apple Inc |
North Media and Apple Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with North Media and Apple
The main advantage of trading using opposite North Media and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Media 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.North Media vs. Matas AS | North Media vs. cBrain AS | North Media vs. Alm Brand | North Media vs. Netcompany Group AS |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
CEOs Directory Screen CEOs from public companies around the world | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |