Correlation Between Apple and ADTRAN

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Apple and ADTRAN 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 Apple and ADTRAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and ADTRAN Inc, you can compare the effects of market volatilities on Apple and ADTRAN 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 Apple with a short position of ADTRAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and ADTRAN.

Diversification Opportunities for Apple and ADTRAN

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Apple and ADTRAN is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ADTRAN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADTRAN Inc and Apple 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 Apple Inc are associated (or correlated) with ADTRAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADTRAN Inc has no effect on the direction of Apple i.e., Apple and ADTRAN go up and down completely randomly.

Pair Corralation between Apple and ADTRAN

Given the investment horizon of 90 days Apple Inc is expected to generate 0.32 times more return on investment than ADTRAN. However, Apple Inc is 3.11 times less risky than ADTRAN. It trades about 0.02 of its potential returns per unit of risk. ADTRAN Inc is currently generating about -0.09 per unit of risk. If you would invest  16,529  in Apple Inc on December 29, 2023 and sell it today you would earn a total of  802.00  from holding Apple Inc or generate 4.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Apple Inc  vs.  ADTRAN Inc

 Performance 
       Timeline  
Apple Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.
ADTRAN Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days ADTRAN Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Apple and ADTRAN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apple and ADTRAN

The main advantage of trading using opposite Apple and ADTRAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, ADTRAN 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 ADTRAN will offset losses from the drop in ADTRAN's long position.
The idea behind Apple Inc and ADTRAN Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

Other Complementary Tools

Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years