Correlation Between Public Service and Apple
Can any of the company-specific risk be diversified away by investing in both Public Service 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 Public Service and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Service Enterprise and Apple Inc, you can compare the effects of market volatilities on Public Service 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 Public Service with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Service and Apple.
Diversification Opportunities for Public Service and Apple
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Public and Apple is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Public Service Enterprise and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Public Service 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 Public Service Enterprise 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 Public Service i.e., Public Service and Apple go up and down completely randomly.
Pair Corralation between Public Service and Apple
Considering the 90-day investment horizon Public Service Enterprise is expected to generate 0.59 times more return on investment than Apple. However, Public Service Enterprise is 1.7 times less risky than Apple. It trades about 0.13 of its potential returns per unit of risk. Apple Inc is currently generating about -0.1 per unit of risk. If you would invest 6,532 in Public Service Enterprise on January 24, 2024 and sell it today you would earn a total of 139.00 from holding Public Service Enterprise or generate 2.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Public Service Enterprise vs. Apple Inc
Performance |
Timeline |
Public Service Enterprise |
Apple Inc |
Public Service and Apple Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Public Service and Apple
The main advantage of trading using opposite Public Service and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Service 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.Public Service vs. Alliant Energy Corp | Public Service vs. Pinnacle West Capital | Public Service vs. FirstEnergy | Public Service vs. Edison International |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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