Correlation Between Zealand Pharma and Apple
Can any of the company-specific risk be diversified away by investing in both Zealand Pharma 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 Zealand Pharma and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zealand Pharma AS and Apple Inc, you can compare the effects of market volatilities on Zealand Pharma 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 Zealand Pharma with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zealand Pharma and Apple.
Diversification Opportunities for Zealand Pharma and Apple
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Zealand and Apple is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Zealand Pharma AS and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Zealand Pharma 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 Zealand Pharma 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 Zealand Pharma i.e., Zealand Pharma and Apple go up and down completely randomly.
Pair Corralation between Zealand Pharma and Apple
Assuming the 90 days trading horizon Zealand Pharma AS is expected to generate 2.19 times more return on investment than Apple. However, Zealand Pharma is 2.19 times more volatile than Apple Inc. It trades about 0.12 of its potential returns per unit of risk. Apple Inc is currently generating about 0.01 per unit of risk. If you would invest 8,420 in Zealand Pharma AS on January 24, 2024 and sell it today you would earn a total of 49,730 from holding Zealand Pharma AS or generate 590.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Zealand Pharma AS vs. Apple Inc
Performance |
| Timeline |
| Zealand Pharma AS |
| Apple Inc |
Zealand Pharma and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zealand Pharma and Apple
The main advantage of trading using opposite Zealand Pharma and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zealand Pharma 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.| Zealand Pharma vs. Bavarian Nordic | Zealand Pharma vs. Ambu AS | Zealand Pharma vs. Genmab AS | Zealand Pharma vs. ALK Abell 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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