Correlation Between Apple and Ameritrust Corp

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

Diversification Opportunities for Apple and Ameritrust Corp

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Apple and Ameritrust is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Ameritrust Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameritrust Corp 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 Ameritrust Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameritrust Corp has no effect on the direction of Apple i.e., Apple and Ameritrust Corp go up and down completely randomly.

Pair Corralation between Apple and Ameritrust Corp

Given the investment horizon of 90 days Apple is expected to generate 48.31 times less return on investment than Ameritrust Corp. But when comparing it to its historical volatility, Apple Inc is 13.88 times less risky than Ameritrust Corp. It trades about 0.01 of its potential returns per unit of risk. Ameritrust Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Ameritrust Corp on December 29, 2023 and sell it today you would lose (13.98) from holding Ameritrust Corp or give up 99.86% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Apple Inc  vs.  Ameritrust Corp

 Performance 
       Timeline  
Apple Inc 

Risk-Adjusted Performance

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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.
Ameritrust Corp 

Risk-Adjusted Performance

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Over the last 90 days Ameritrust Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Ameritrust Corp is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Apple and Ameritrust Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apple and Ameritrust Corp

The main advantage of trading using opposite Apple and Ameritrust Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Ameritrust Corp 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 Ameritrust Corp will offset losses from the drop in Ameritrust Corp's long position.
The idea behind Apple Inc and Ameritrust Corp 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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