Correlation Between Reitmans and Apple
Can any of the company-specific risk be diversified away by investing in both Reitmans 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 Reitmans and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reitmans Limited and Apple Inc, you can compare the effects of market volatilities on Reitmans 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 Reitmans with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reitmans and Apple.
Diversification Opportunities for Reitmans and Apple
Very poor diversification
The 3 months correlation between Reitmans and Apple is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Reitmans Limited and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Reitmans 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 Reitmans Limited 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 Reitmans i.e., Reitmans and Apple go up and down completely randomly.
Pair Corralation between Reitmans and Apple
Assuming the 90 days horizon Reitmans Limited is expected to generate 0.43 times more return on investment than Apple. However, Reitmans Limited is 2.3 times less risky than Apple. It trades about -0.18 of its potential returns per unit of risk. Apple Inc is currently generating about -0.19 per unit of risk. If you would invest 185.00 in Reitmans Limited on January 20, 2024 and sell it today you would lose (5.00) from holding Reitmans Limited or give up 2.7% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Reitmans Limited vs. Apple Inc
Performance |
Timeline |
Reitmans Limited |
Apple Inc |
Reitmans and Apple Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Reitmans and Apple
The main advantage of trading using opposite Reitmans and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reitmans 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.Reitmans vs. Intema Solutions | Reitmans vs. 888 Holdings | Reitmans vs. Royal Wins | Reitmans vs. Churchill Downs Incorporated |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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