Correlation Between Vale SA and APPLE
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By analyzing existing cross correlation between Vale SA ADR and APPLE INC, you can compare the effects of market volatilities on Vale SA 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 Vale SA with a short position of APPLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vale SA and APPLE.
Diversification Opportunities for Vale SA and APPLE
Very weak diversification
The 3 months correlation between Vale and APPLE is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Vale SA ADR and APPLE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLE INC and Vale SA 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 Vale SA ADR 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 Vale SA i.e., Vale SA and APPLE go up and down completely randomly.
Pair Corralation between Vale SA and APPLE
Given the investment horizon of 90 days Vale SA ADR is expected to under-perform the APPLE. In addition to that, Vale SA is 2.6 times more volatile than APPLE INC. It trades about -0.24 of its total potential returns per unit of risk. APPLE INC is currently generating about -0.14 per unit of volatility. If you would invest 9,345 in APPLE INC on December 29, 2023 and sell it today you would lose (147.00) from holding APPLE INC or give up 1.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Vale SA ADR vs. APPLE INC
Performance |
Timeline |
Vale SA ADR |
APPLE INC |
Vale SA and APPLE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vale SA and APPLE
The main advantage of trading using opposite Vale SA and APPLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vale SA 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.Vale SA vs. MP Materials Corp | Vale SA vs. NioCorp Developments | Vale SA vs. Materion | Vale SA vs. Vizsla Resources Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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