Correlation Between Petrochemical and Apple
Can any of the company-specific risk be diversified away by investing in both Petrochemical 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 Petrochemical and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrochemical and Apple Inc, you can compare the effects of market volatilities on Petrochemical 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 Petrochemical with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrochemical and Apple.
Diversification Opportunities for Petrochemical and Apple
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petrochemical and Apple is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Petrochemical and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Petrochemical 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 Petrochemical 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 Petrochemical i.e., Petrochemical and Apple go up and down completely randomly.
Pair Corralation between Petrochemical and Apple
Assuming the 90 days trading horizon Petrochemical is expected to under-perform the Apple. In addition to that, Petrochemical is 1.62 times more volatile than Apple Inc. It trades about -0.11 of its total potential returns per unit of risk. Apple Inc is currently generating about -0.07 per unit of volatility. If you would invest 17,085 in Apple Inc on January 25, 2024 and sell it today you would lose (395.00) from holding Apple Inc or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Petrochemical vs. Apple Inc
Performance |
| Timeline |
| Petrochemical |
| Apple Inc |
Petrochemical and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrochemical and Apple
The main advantage of trading using opposite Petrochemical and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrochemical 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.| Petrochemical vs. Computer Direct | Petrochemical vs. Migdal Insurance | Petrochemical vs. Homebiogas | Petrochemical vs. Isras Investment |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |