Correlation Between Strategic Investments and Apple
Can any of the company-specific risk be diversified away by investing in both Strategic Investments 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 Strategic Investments and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and Apple Inc, you can compare the effects of market volatilities on Strategic Investments 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 Strategic Investments with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and Apple.
Diversification Opportunities for Strategic Investments and Apple
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strategic and Apple is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Strategic Investments 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 Strategic Investments 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 Strategic Investments i.e., Strategic Investments and Apple go up and down completely randomly.
Pair Corralation between Strategic Investments and Apple
Assuming the 90 days trading horizon Strategic Investments AS is expected to under-perform the Apple. In addition to that, Strategic Investments is 1.45 times more volatile than Apple Inc. It trades about -0.05 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 | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Strategic Investments AS vs. Apple Inc
Performance |
| Timeline |
| Strategic Investments |
| Apple Inc |
Strategic Investments and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and Apple
The main advantage of trading using opposite Strategic Investments and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments 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.| Strategic Investments vs. Newcap Holding AS | Strategic Investments vs. SKAKO AS | Strategic Investments vs. Rovsing 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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