Correlation Between Turtle Beach and Apple

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

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

Diversification Opportunities for Turtle Beach and Apple

-0.59

Correlation Coefficient

Turtle Beach  Apple

Excellent diversification

The 3 months correlation between Turtle and Apple is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Turtle Beach Corp and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Turtle Beach 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 Turtle Beach Corp 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 Turtle Beach i.e., Turtle Beach and Apple go up and down completely randomly.

Pair Corralation between Turtle Beach and Apple

Given the investment horizon of 90 days Turtle Beach Corp is expected to generate 3.77 times more return on investment than Apple. However, Turtle Beach is 3.77 times more volatile than Apple Inc. It trades about 0.14 of its potential returns per unit of risk. Apple Inc is currently generating about -0.13 per unit of risk. If you would invest  1,034  in Turtle Beach Corp on January 18, 2024 and sell it today you would earn a total of  470.00  from holding Turtle Beach Corp or generate 45.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Turtle Beach Corp  vs.  Apple Inc

Turtle Beach Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Turtle Beach Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Turtle Beach reported solid returns over the last few months and may actually be approaching a breakup point.

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 latest conflicting 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.

Pair Trading with Turtle Beach and Apple

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

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.