Correlation Between BankInvest Optima and Apple

Can any of the company-specific risk be diversified away by investing in both BankInvest Optima 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 BankInvest Optima and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BankInvest Optima 30 and Apple Inc, you can compare the effects of market volatilities on BankInvest Optima 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 BankInvest Optima with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankInvest Optima and Apple.

Diversification Opportunities for BankInvest Optima and Apple

-0.87

Correlation Coefficient

BankInvest Optima  Apple

Pay attention - limited upside

The 3 months correlation between BankInvest and Apple is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Optima 30 and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and BankInvest Optima 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 BankInvest Optima 30 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 BankInvest Optima i.e., BankInvest Optima and Apple go up and down completely randomly.

Pair Corralation between BankInvest Optima and Apple

Assuming the 90 days trading horizon BankInvest Optima 30 is expected to generate 0.23 times more return on investment than Apple. However, BankInvest Optima 30 is 4.33 times less risky than Apple. It trades about 0.11 of its potential returns per unit of risk. Apple Inc is currently generating about -0.18 per unit of risk. If you would invest  10,115  in BankInvest Optima 30 on January 25, 2024 and sell it today you would earn a total of  195.00  from holding BankInvest Optima 30 or generate 1.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

BankInvest Optima 30  vs.  Apple Inc

BankInvest Optima

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Optima 30 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, BankInvest Optima is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Apple Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with BankInvest Optima and Apple

The main advantage of trading using opposite BankInvest Optima and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BankInvest Optima 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.

The idea behind BankInvest Optima 30 and Apple 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.